'Top execs took pay cuts': NR Narayana Murthy on how Infosys handled freshers' onboarding during 2001 dot-com bust

Amid massive delays in the onboarding of freshers at several tech firms, Infosys founder NR Narayana Murthy has shared how he handled a similar situation during the 2001 dot-com bust.

In the last few months, several tech companies including Infosys, Wipro, and TCS have delayed the onboarding of freshers due to adverse economic conditions globally. Onboarding refers to a situation when a company has made an offer to a candidate but has not completed the joining process.      

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Murthy said during the internet bust, his company had made offers to some 1,500 freshers. But when things did not go as per plan, he said, top executives took huge pay cuts to honour all the offers.

"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," Murthy said while speaking to Moneycontrol.

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"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.

Murthy said Infosys was the only company to do so and that he was very proud of this move. He, however, refused to comment further on the current onboarding issue. "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.

The tech pioneer has on many occasions batted for a higher package for freshers and cut in the salary of top executives. Speaking on the pay gap between freshers and top executives, Murthy recently said that business leaders have to embrace compassionate capitalism and make capitalism an acceptable paradigm.

And that can happen. he said, only if the leaders offer as much of comfort to the people about capitalism and they demonstrate that capitalism is all about high growth, high earning, and high salary for everybody.

The Infosys founder's comment on onboarding comes at a time when the IT sector is staring at a bleak future at least this year due to the prediction of an impending economic slowdown in the US and Europe. Due to fears of a revenue slump, the companies have started taking steps to reduce costs.

Last month, Business Today reported that Infosys had sacked hundreds of fresher employees after they failed to clear the internal fresher assessment (FA) test.

Business Today has previously reported that several tech firms including Infosys, Wipro, Tech Mahindra, Capgemini, Accenture, Mphasis, Mindtree, Deloitte, and others have been delaying the onboarding of freshers. These companies say that the joining dates will be given to employees based on business requirements.