India's second-largest software outsourcer Infosys is planning to cut up to 5,000 jobs, a report said Friday, as it seeks to reduce costs in a tough business environment.

"Infosys is asking the worst performers, about 3-4 percent of the 151,000 work force, to leave straightaway," The Economic Times said, citing people familiar with the development.

The Bangalore-based firm wants to reduce costs while moving towards a more aggressive sales strategy, the business daily said.

Infosys was not available to comment on the report when contacted by AFP.

The firm, which is also listed on the Nasdaq in New York, has been struggling to expand its business and has missed sales targets, lost market share and seen its stocks slide in the past year as revenues from the United States slow down.

Amid intense competition, Infosys, which lags in growth to rivals TCS and Wipro, in October announced a six-percent pay rise for Indian employees and a two-to-three percent increase for overseas staff.

The firm projected an unchanged estimate of $7.34 billion for its full-year revenues for the fiscal year ending March 2013.

It will report its third quarter earnings next week, but analysts say the near-term outlook for the firm remains challenging.

Infosys, which is in the midst of a top management shuffle, has decided to focus on higher value software and consulting services for clients instead of labour-intensive outsourcing services.

One-fifth of Infosys' revenues come from Europe, and in recent years the firm has shifted focus to emerging and new markets such as Singapore, Brazil, Mexico and eastern Europe.