More employees quit Infosys than its net hiring

Bangalore: Country's second largest software firm Infosys Technologies lost more employees than its net hiring during the October-December quarter.

While the company hired 11,067 employees in the third quarter this fiscal, nearly 5,756 exited the organisation during the same period, taking the net addition to 5,311, the company said.

The attrition rate has gone up to 17.5 per cent by December from 11.6 per cent in like period year-ago, Infosys said in a statement.

It stood at 17.01 per cent at the end of the previous quarter (September),

However, according to the statement, the company's attrition rate (last 12 months (LTM) basis) stood at 17.5 per cent in the third quarter of this fiscal compared to 17.1 per cent in the preceding quarter.

"Employee referrals are at an all-time high. Lateral hiring was a record this quarter," Infosys Member of the Board and Head HRD and Education & Research TV Mohandas Pai said.

As on December 31, 2010, Infosys and its subsidiaries employed a total of 1,27,779 people compared to 1,09,882 at the end of December 31, 2009, it added.

The company had earlier said it expects to hire about 40,000 people this year by March 31, 2011.

"Our attrition has reduced. The employee engagement programme has shown good results. Employee referrals are at an all time high. Lateral hiring are a record this quarter,"

Infosys CFO SD Shibulal added, "After the slowdown attrition went up. But now this has stabilised and is not that big a concern. The industry has always been able to manage it."

"Hiring at entry level is not that difficult, but hiring experienced people is a challenge since we are picking up people from other companies. It is like a musical chair that goes on," Infosys CEO and MD S Gopalakrishnan said.

The company, which counts BT Group, BP Plc and Goldman Sachs among its clients, said it has added 40 clients during the quarter taking its total active clientele to 612.

'Macro environment concerns could impact IT industry growth'

IT major Infosys today said next year could be normal for IT industry, but cautioned that "it is still possible something bad could happen".

"Recovery is happening, the industry is benefitting, but it is still possible something bad could happen. We need to be cautious. It has not impacted our business so far," Infosys CEO and MD S Gopalakrishnan said.

"If something bad happens it could have a domino effect, The consequences are unpredictable," he said.

Such an uncertainty could affect their client's business and in turn impacting the company, Gopalakrishnan pointed out.

Infosys today posted 14.2 per cent growth in profit at Rs 1,780 crore for the third quarter and also raised outlook for the January-March period and whole of current financial year based on expected demand on new services and its revenue growth.

"Next year could be normal year of the IT service", he added "there is crisis in Europe, the volatility is high ... we need worry about it. Repercussions could be global".

However, he was confident that Infosys and the IT industry could weather all odds. "We are confident that the industry will do well in difficult times. The industry has gone through such downturn twice in ten years... Indian industry has done better than those globally. We are confident it will be able to withstand such downturn".

"The crisis can also lead to greater currency volatility and capital inflows moving to developing markets like Brazil, South Korea and Japan where yields are going up. The Rupee will be under pressure to depreciate than appreciate as we have", said V Balakrishnan, CFO.

Confidence blues over Infosys result

Tech major Infosys' dismal earning numbers spooked investors confidence, leading to a fresh bout of selling, pulling down the benchmark S&P CNX Nifty by 111.35 points at the National Stock Exchange (NSE).

The 50-share index shuttled between 5,857.75 and 5,736.70 before closing at 5,751.90, down 111.35 points, or 1.90 per cent, over its previous close.

Defying bullish global sentiment, trading began on a low note over Infosys Technology's disappointing Q3 performance.

The market momentum was highly demoralising with fresh bouts of profit-taking after overnight steep rally with most of the selling being in tech counters.

The gap widened as the session progressed and spread into frontline and banking counters, taking the key-index into deep red.

"Investors' confidence is shaky and cautious at this juncture. Hence, there is no buying. The coming days will be highly debated over Q3 performance of the Indian-Inc," traders said.

Infosys Tech, PNB, SBIN, IDFC, ICICI Bank, Axis Bank, Kotak Bank, BPCL, Wipro and HCL Tech were the top losers from Nifty.

Ambuja Cements, ONGC, Tata Motors and ACC registered good gains in today's falling market.

Total turnover in the cash segment declined to Rs 14,154 crore from Rs 15,333.81 crore yesterday. A total of 6,414.27 lakh shares changed hands in 59,99,082 trades and market capitalisation stood at Rs 67,43,694 crore at the end of day.