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Infosys reduces staff strength of R&D arm

In yet another indication that Infosys is trying to put the focus back on its traditional services, the company is cutting the strength of its R&D arm, called Infosys Labs, and is moving these employees to billable projects on the IT services side.
The Labs division was a technology and domain-focused team of 600, developing proprietary technologies . The plan is to reduce the strength by at least 30% over time, said sources familiar with the development .

Some employees will be moved to billable positions to increase revenue productivity . "Delivery managers in Labs have been asked to 'let out' people to other projects . If an employee refuses to move, it gets registered on the company's internal database system Alcon. And if an employee registers two refusals consecutively on the Alcon system, it could put his or her job at risk," said a source.

Asked about this development , the company spokesperson said, "We don't comment on matters related to our internal organization." Infosys Labs, established in 1999, works to find ways to produce cheaper, faster and better services, and shares synergies in particular with the PPS (products, platforms and solutions) business.

Given Infosys's stated desire to focus on the non-linear revenue model - where PPS plays a big role - the reduction in the Labs' strength appears out of line. But it is perhaps in keeping with chairman N R Narayana Murthy's idea of taking a step back into the traditional space of application development and maintenance (ADM) and infrastructure services in the short term.

ADM and infrastructure services have been the spaces that have driven revenues for the industry's growth leaders - TCS, Cognizant and HCL - in recent years. Infosys's assessment is that it took its eyes off those spaces in its effort to build the non-linear business . Murthy has said he would create a desirable Infosys in 36 months, and has said that the products & platforms business would be a medium-term focus.

The talk in Infosys is that the Labs development followed soon after Murthy's son and executive assistant Rohan Murty had a meeting with business unit heads, including Labs head Subrahmanyam Goparaju, and reviewed the performance of each unit.

He is said to have interacted with several principal and senior software architects in the division. Infosys Labs was formerly called Software Engineering and Technology Labs (SetLabs).

It collaborates with various universities -- University of Cambridge, University of Illinois at Urbana Champaign , Indian Institute of Technology Bombay, Monash Research Academy, Purdue University and Queens University Belfast.

It is working on immersive technologies like augmented reality, touch and gesture interfaces and data visualization.

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