Infosys top execs took pay cut, honoured all fresher offers during 2001 dotcom bust: Narayana Murthy on onboarding delays

Narayana Murthy

Infosys had honoured offers made to all 1,500 freshers during the 2001 dotcom bust, and instead took the largest pay cuts at the Board of Directors and executive level said founder Narayana Murthy on the sidelines of the Nasscom Technology and Leadership Forum.

His comments come at a time when IT companies have delayed onboarding of freshers indefinitely in a harsh demand environment and macroeconomic climate.

Moneycontrol reported last week that Wipro asked freshers to accept a 46 percent pay cut in order to be onboarded faster.

Murthy said that he is not judging the situation at hand since he doesn’t have all the data currently.

“What I can say is what we did…when there was internet bust was we had given offers to about 1,500 freshers and the think tank in the company we all sat down, and we decided to take the largest salary cut for the internal board of directors, then the next large salary cut for the next level executive vice president, etc. Then, we welcomed every one of those 1,500 people,” he said.

He added that they were the only company to do so and that he is very proud of the same.

“Beyond this, I am not going to say what is the fair thing and what's not the fair thing because I don't know,” he said.

His remarks come at a time when there is a significant pay disparity between CEOs of IT firms and freshers.

According to a Moneycontrol analysis, the pay of IT company CEOs increased by 835 percent in a decade, compared to 45 percent for newer employees.

They also assume importance when the sector has seen its net addition numbers decline significantly quarter-on-quarter and freshers have complained about being left hanging.

On the present demand environment, Murthy said that every investor, CEO, investment company, etc., know that there will always be ups and downs.

“I am not that much worried about the trough that may come. The reality is most Indian companies, particularly Indian software companies, are growing pretty well. When there is a downturn in the US, they'll be focused on better value for money. Indian software companies do provide good value for money,” he said.

His own surmise he said, is that the prospects for Indian software companies will be better because the focus is on better allocation of money.