With fears of large-scale layoffs in IT companies looming large, statements made by industry pioneer and Infosys co-founder NR Narayana Murthy in two separate interviews might allay fears regarding the gravity of the current crisis.
Murthy advocates measures to counter the current situation primarily by cutting disposable incomes of senior employees and encouraged the practice of “capitalism in mind and socialism in heart” .
Speaking to ET Now’s Chandra R Srikanth, Murthy said that this is not the first time that the industry was facing a crunch and there was no need to be "extremely anxious".
“We have gone through these troughs several times in the past. We went through that in 2008, we went through that in 2001 at the time of internet bust. So, this is nothing new. Therefore, there is no need for us to become extremely anxious,” Murthy said in the ET Now interview.
He also suggested that top level employees take pay cuts in order to protect jobs of young people.
“In 2001, when the market actually shrank, the senior management decided ‘Let us make some sacrifice and ensure that we protect the jobs of youngsters’ and at that time we had offered jobs to 1500 engineers. Several companies were postponing the joining date. We said let's not do that, let us demonstrate our commitment to youngsters by the senior people taking some salary cuts based on the disposable income and reducing that kind of cut as we went down the hierarchy and let's welcome these 1500 engineers,” Murthy said during the ET Now interview.
Murthy also pointed out that along with this, industry leaders have to spot new opportunities and train young engineers in these new technologies in order to stay relevant.
“It is incumbent on the leaders of the industry to find reasonable solutions and I have no doubt that many of them are finding,” Murthy told ET. He concluded, “A stable corporation is one where every employee is happy.”
In another interview with Moneycontrol’s Malini Bhupta, Murthy made a statement which can be considered radical on the issue of IT employees forming unions.
“If your philosophy of compassionate capitalism is clear and if you operate on that philosophy, then it becomes simple to lessen the pain of middle and lower-level employees,” he said.
Elaborating on the idea of his “compassionate capitalism”, Murthy said, “employees should be the last one to suffer”.
“The leaders and seniors have to sacrifice more compared to the middle and junior level people. In other words, there will have to be salary cuts based on the disposable income of employees and there will have to be stringent cost control.
If these are not just sufficient, then profits will have to be sacrificed and dividends will have to be reduced to take care of the employees with low disposable income and keep the corporation strong in tough times. This is how we, the founders and early adopters of Infosys, conducted ourselves at Infosys during tough times. Employees should be the last to suffer. This is what compassionate capitalism is all about,” he told Moneycontrol.
Speaking on the challenge that automation brings to jobs, Murthy said, “We have to realise that newer and newer technologies will come. Automation will become more and more ubiquitous. This has to be accepted. The challenge for our industry leaders is to create new markets and create new opportunities and jobs in the scenario of changing technologies.”