Business Perspective to the Cancellation of Intent of Offer

During the time of the 2000 slump, CEO of Veritas Software Corp, a storage software maker, Gary Bloom bravely declared to the media that in-spite of economy downturns, he did not plan to slash expenses. The company would remain fully invested in research and development and sales operations. This defying statement and action resulted in a 26% drop in the stock prices.

Ladies and gentlemen,
Welcome to 10th Mar, 2000, the day of dotcom bubble burst. Till then, world economy saw investors, blindly grabbing every new dotcom issue without even looking at its business plan. But, fairy tales have no place in the stock markets. Companies started realizing that they had over estimated the internet phenomenon and began applying brakes to their ambitious investment plans.
Unfortunately and unexpectedly, newsmakers Infosys, a global consulting and IT services company, was also caught in the whirlpool of market recession.

The rationale behind cancelling job offers for IIT, Mumbai could be sending the right signals to the market. Had Infosys not declined the offer letters, it would have projected the image of a highly risk prone organization and would have lost on popularity grounds among the investors.
On the other hand, regarding its image as “the Best Employer”, I completely go with Arup. This is an exceptional episode and shall not individually tarnish the image of Infosys as Great Employers. Infosys has emerged as one of the toughest recruiters of its time. It is a well-known fact, that out of more than 1 million applicants, it recruits less than 1% every year. The number of applicants, keep growing every year which signifies that such small incidents hardly affect the image of the company.

Extract from the case,
“Another student, who was also picked up by Infosys asks:‘‘Why did they present themselves as unaffected by the slowdown when they sent us offer letters? Why are they recruiting fresh students in the first place when those recruited from the last batch are simply sitting on the bench?’’
If we see the milestones achieved by Infosys in the past, we realize that the years 2000 and 2001 were as instrumental as any other year. The company opened offices in Honk Kong and France. It set up development bases in Canada, UK and US. The spectacular growth process continues in the subsequent years and it doubles its revenues every year. (Refer http://www.infosys.com/about/who-we-are/pages/history.aspx). So the claim by the student that Infosys is pretending to be unaffected by the slowdown is unauthenticated. We can only conclude that the reasons for job offer cancellations were strategic business requirements.
Another reason for job cancellation could be the company’s need for different talent during the critical world expansion plans. May be they wanted experienced hands than new comers.

The response by the Infosys Bangalore office regarding the cancellation of the offer is a highly professional piece of rhetoric and completely acceptable. Unfortunately, the candidates have become a victim of non exposure to the general professional practices.

As a IIT course coordinator, I would rework the career planning strategy with students. Instead of banking solely on one prime recruiter, I would ask them to keep their options open and have a back up company or choice as well. The change in campus placement date is a vital step in this regard.

The effect of recruiting 60 new candidates on a company who hires on an average 40 new employees per day, would be minuscule. Yet Infosys takes the decision which speaks about it’s stringent HR practices. Yet I feel, that the stature and credibility that Infosys carries with it’s name, demanded a more innovative handling of the situation rather than cancelling the job offers as an instant cost cutting measures.