Infosys defies slump in IT sector, to hire 13,000 in 2012-13

Despite the inertia in the industry, information technology (IT) giant Infosys will hire about 13,000 employees for its business process outsourcing (BPO) segment in the current financial year.

Raghavendra K, vice-president, BPO (human resources development) told MAIL TODAY: "This is an industry which will even work during recession. When the economy is booming, there is growth in business with companies looking at outsourcing more, and in times of recession, firms outsource to save costs."

The Bangalore-based company had hired about 9,000 professionals last year.

"We can economise, add value and come up with great output and outcome for our customers," Raghavendra said adding "the industry is designed such that it has to provide services as long as the business exists". 

At a time when attrition remains the biggest concern of the BPO sector, Raghavendra said he is not alarmed. In fact, the Infosys BPO segment has initiated some processes to retain talent.

"One should not be alarmed by the attrition rate in the BPO industry, which has spiralled 75 per cent. Moreover, in India, where there are huge employment opportunities, and with recruitment happening in every other sector, attrition seems plausible," Raghavendra added.

He pointed out that one should not look at attrition in the BPO sector as an isolated case. The company, which serves many international majors, has attrition of about 30 per cent, which is a bit higher than that of the entire industry.

Raghavendra observed that the cause of higher attrition is linked to most employees leaving jobs for higher education. 

In order to contain the problem, he said: "We have programmes to support higher education of our employees. We also have a policy to fill up 70 per cent of our existing vacancies with lateral (experienced) hiring."

Nasscom sticks to growth forecast of 11-14%

IT industry body Nasscom on Thursday said it maintains its growth projection of 11-14 per cent for the current financial year and will review it in October, even as some member companies have given muted forecast amid global economic uncertainties.

"We don't think it is in need for us to change it ... we will review it back in October and if need we could raise it upwards or downwards," Nasscom President Som Mittal told reporters here.

He added fundamentals of the industry still remain extremely strong.

Mittal said when Nasscom gave its forecast in February, it was termed as "conservative", but as some companies have reported muted earnings in the January-March quarter of last fiscal, the forecast is being seen as too optimistic.

"We gave this forecast in February and we were told how conservative we are and when are you going to revise it upwards. And then one quarter of results came out and then we are suddenly asked: you are so optimistic nobody aligns with you and when are you revising it downwrds...," he said.

The National Association of Software and Services Companies (Nasscom) in February forecast that export revenues from the infotech and IT-enabled services sector would grow between 11 per cent and 14 per cent in US dollar terms, while the domestic market would grow 13-16 per cent in rupee terms.

However, the global economic uncertainty has led to flat or reduction in budgets for outsourcing services by western clients, fanning fears of reduced margins. Indian IT players get almost 80 per cent of their revenues from the US and European markets.

Infosys and Wipro have already given muted guidance for this fiscal.

Infosys defies slump in IT sector, to hire 13,000 in 2012-13

Despite the inertia in the industry, information technology (IT) giant Infosys will hire about 13,000 employees for its business process outsourcing (BPO) segment in the current financial year.

Raghavendra K, vice-president, BPO (human resources development) told MAIL TODAY: "This is an industry which will even work during recession. When the economy is booming, there is growth in business with companies looking at outsourcing more, and in times of recession, firms outsource to save costs."

The Bangalore-based company had hired about 9,000 professionals last year.

"We can economise, add value and come up with great output and outcome for our customers," Raghavendra said adding "the industry is designed such that it has to provide services as long as the business exists". 

At a time when attrition remains the biggest concern of the BPO sector, Raghavendra said he is not alarmed. In fact, the Infosys BPO segment has initiated some processes to retain talent.

"One should not be alarmed by the attrition rate in the BPO industry, which has spiralled 75 per cent. Moreover, in India, where there are huge employment opportunities, and with recruitment happening in every other sector, attrition seems plausible," Raghavendra added.

He pointed out that one should not look at attrition in the BPO sector as an isolated case. The company, which serves many international majors, has attrition of about 30 per cent, which is a bit higher than that of the entire industry.

Raghavendra observed that the cause of higher attrition is linked to most employees leaving jobs for higher education. 

In order to contain the problem, he said: "We have programmes to support higher education of our employees. We also have a policy to fill up 70 per cent of our existing vacancies with lateral (experienced) hiring."

Weak US job figures for May hit markets

Stock markets have fallen following worse-than-expected US job figures.

The Dow Jones closed down 275 points, or 2.2%, while in Frankfurt the Dax was down 3.4%, in Paris the Cac 40 fell 2.2% and London's FTSE 100 lost 1.1%.

The US economy added 69,000 jobs in May, well below forecasts. It was the smallest number created since May 2011.

Earlier, EU figures showed the eurozone jobless rate at 11% in April, unchanged from March, but still the highest since records began in 1995.

In London, the FTSE 100 index closed down 1.1%.

Responding to the job figures, US President Barack Obama said there was "a lot of work to do to get to where we want to be... but we will come back stronger".

While pointing out that the manufacturing sector had been "consistently adding jobs for the first time since the 1990s", he called on Congress to pass more measures included in his jobs bill that would help put people back to work.

"There is no excuse when so many people are looking for work. Now is not the time to play politics, not the time to sit on your hands," he said.

He highlighted measures to prevent more layoffs, proposed legislation to put construction workers back in work, tax breaks for small companies to help them hire more staff and measures to help homeowners refinance their mortgages.

'Awful number'

The US jobless rate rose to 8.2% from 8.1% in April, the Labor Department said.

To make matters worse, the number of jobs added in March and April was revised down by 49,000.

There are five million fewer jobs in the US than there were when the recession began.

Republican presidential candidate Mitt Romney said: "Today's weak jobs report is devastating news for American workers and American families."

He described the report as, "a harsh indictment of the president's handling of the economy".

Employment increased in the categories of healthcare, transport and storage, and wholesale trade, but declined in construction.

The number of people who had been unemployed for more than 27 weeks, who are classified as long-term unemployed, rose to 5.4 million in May from 5.1 million in April.

They account for 42.8% of the unemployed.

"It's an awful number," said Rick Meckler, president of Libertyview Capital Management in New Jersey.

"Not only is it awful in its numerical terms, it comes at a very skittish time in the markets because of the European crisis. A number like this brings concern about a global slowdown."

The participation rate, which shows the number of people employed as a proportion of the workforce, rose to 63.8% from 63.6%, reversing the decline seen in April.

Global problems

European stock markets and US stock market futures were already lower following more signs of weakness in the Chinese and eurozone economies.

As well as the eurozone jobless figures, an influential business survey for the eurozone suggested the pace of contraction in its manufacturing sector was increasing.

And a similar report in China showed activity in its biggest, mainly state-owned, factories hit the lowest point this year in May due to weak domestic demand.

Following the release of the US jobs figures the euro briefly fell below $1.23 to hit its lowest level since July 2010, before recovering to stand at $1.2355.

The final estimate for the US purchasing manager's index (PMI) for May suggested that the manufacturing sector was growing, but by less than it had done since February.

The PMI came in at 54.0, down from 56.0 in April. Any figure above 50 indicates growth.

Separate figures showed that there was a small rise in US consumer spending in April. It rose 0.3%, having gone up by a revised 0.2% in March.

Personal incomes grew by 0.2% in April, which was the smallest gain since November and suggests spending may be limited in the coming months.

Consumer spending accounts for about 70% of US economic activity.

Oracle suffers setback in copyright battle against Google

A judge has dismissed Oracle's key argument in a long-running copyright battle against Google.

The dispute centred over whether the Android-developer should be fined for using some of Oracle's Java software components without paying it for a licence.

Oracle had sought up to $1bn (£653m) in compensation claiming Google was guilty of copyright infringement.

The ruling addresses an issue that had split a jury in a trial last month.

Google described the news as "a good day for collaboration and innovation".

Oracle said it would "vigorously appeal the decision".

API arguments

The case related to Google's use of Oracle's APIs (application programming interfaces). These had been used to let developers write Java-compatible code for its Android system.

APIs are used to let different parts of a program or operating system communicate with each other as well as permitting one application to share content with another.

While Oracle allows anyone to use its Java programming language for free, it had argued the same rule did not apply to related APIs.

Specifically it said Google should have paid a licence before "replicating the structure, sequence and organisation" of the code in 37 Java-related API packages.

'Sweeping proposition'

In his ruling the judge noted that 97% of the lines of code used in the disputed packages had been rewritten by Google.

He said the case therefore depended on whether Oracle should be given ownership of "any and all ways to implement a function" based solely on the fact it had copyrighted one version.

In other words, that Oracle could copyright an idea rather than just the expression of an idea.

The judge noted that such a "sweeping proposition" had never been established in law, and thus ruled in Google's favour.

However, he stressed that his decision had limited ramifications.

"This order does not hold that Java API packages are free for all to use without licence," wrote Judge Alsup.

"It does not hold that the structure, sequence and organization of all computer programs may be stolen. Rather, it holds on the specific facts of this case, the particular elements replicated by Google were free for all to use under the Copyright Act."

Unresolved

Ben Evans, who helps develop Java's technical specifications as part of the Java Community Process Executive Committee, said he had mixed feelings about the ruling.

But he said the issue had still not been fully resolved and the US should follow a recent EU ruling which made it clear that the functionality of any computer program could not be protected by copyright.

"If this is the prevailing view in US law, it should be encoded so as to be compatible with EU law," Mr Evans told the BBC.

"The technology industry has enough legal uncertainty without having major differences between two of the world's major markets for software.

"There is a risk that platform developers will still feel pressured to create APIs that work in different ways risking the fragmentation of Java where programs written in the language could not be guaranteed to be compatible across Android, Windows, Linux and other operating systems."