Monday, April 27, 2009

Where exactly is the recession? Infosys shows the way.

Just a few days ago, while declaring its Q4 results, Infosys announced a freeze on salaries and reduction in variable pay (see here). This effective means reduced take home salary for the employees. All this when the profit dipped by a mere 1.7% over its Q3 profit. Note, however, that Infosys actually made an yearly profit of 29%.

"Ok!", I thought, "here's a company which is sitting on a pile of cash; it has zero debts. So, if they are reacting to cut operational costs, they must know something that I do not. The world economy must be heading for a major downturn in the days ahead."

Now comes the news that Infosys Top Brass will get over Rs. 10-Crore Hike.

Doesn't the hike freeze apply to all? Oh I understand: the employees have to tighten their belt because Q4 results are bad and Infosys expect a dip of 3-6% profit in the future, but the top brass is being rewarded for the Year-on-year jump in profit.

Wait. This can't be right. What am I saying? I don't quite understand this. What am I missing here?

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