Infosys is going to transform its pyramid based organisation into flatten based one so that the decision-making process can become more expeditious. For this company has planned to cut down positions at Job Level (JL) 7 and above, in the ranks of delivery managers, industry principal, AVPs, VPs and SVPs. JL 7 are mainly consulting role positions. Infosys has planned to scale down 10% to 15% Jobs of the JL7 and above. This means that about 1,300 executive jobs at Senior Positions will be affected by this decision.
According to sources abrogating unnecessary consultation positions will help to fix greater responsibility and accountability on senior executives who are not billable resources but people managers. The initiative to reduce the five-tiered structure to two-tiered will be done in job departments of sales, delivery, BPO and Support Services.
The decision was taken after Company’s CEO Salil Parekh had reviewed each vertical working structure closely and found that there were many overlaps in the structure. For instance, in top position jobs, there are delivery managers who have to report to their superior – senior delivery managers who then report to the delivery head who then reports to the Service offering head and the report subsequently reaches the business unit head.
The company feels handling too many handlers is irrelevant. The decision will give more flexibility to frontline leaders which will lead to a faster decision-making process. This will also reduce companies’ cost in giving salaries to executives that are to be furloughed. Infosys on an average spends Rs 35- Rs 40 lakh in paying a delivery manager.
The company has said, “We have no plans or targets for workforce reduction. Nor do we have any predefined percentage of exits as a result of our half-yearly and yearly performance cycles. However, as a performance-driven organisation, some involuntary attrition is integral to the normal course of business every year at Infosys”.
Wedbush Securities, Managing Director, Moshe Katri said – “(Senior layoffs) are likely a function of ongoing efforts to flatten the pyramid structure at Infosys, aiming at encouraging communications among all levels of personnel as well as eliminating redundancies”.
Susquehanna Financial Group (SFG)’s James Freidman said, “reskilling” underway at Infosys and throughout the industry. “So much of the company’s heritage was from operational excellence of the extreme offshoring of maintenance and infrastructure. But today’s architecture really emphasizes innovation and ideation, and those may require some reassessment at the front end of the organization”.