Country's top software exporter TCS today toppled its main rival Infosys Technologies as the most valued IT company in the country.
Shares of Tata Consultancy Services (TCS) rallied over 6 per cent on the Bombay Stock Exchange, taking its market capitalisation to Rs 1.62 lakh crore, higher by Rs 3,470 crore than Infosys' Rs 1.59 lakh crore valuation.
The Tata Group company TCS is now the fourth most valued company in the country. Billionaire Mukesh Ambani-led Reliance Industries is the most valued firm with market valuation of Rs 3.47 lakh crore as of today, followed by state-run ONGC and NTPC in that order. Infosys is at the fifth place in the top group.
TCS's over 24 per cent rise in April-June quarter profit at Rs 1,906 crore saw it shares surging on BSE. The counter closed up by a whopping 6.16 per cent, the highest among Sensex stocks.
TCS pips Infy as the most valued IT company in India
TCS looks to generous variable pay to keep staff
The country’s biggest software exporter, Tata Consultancy Services (TCS), which competes with rivals Infosys Technologies and Wipro for talent, will bank on a generous quarterly variable pay linked to the company’s performance to retain talent, a senior executive said.
TCS battles rising employee churn as demand for IT services revives, and unlike Infosys and Wipro, does not have the benefit of Esops as a tool to retain employees. “We have the variable option, which we pay out at the end of the quarter. Last year, in three quarters, we paid more than 100%. Two quarters (Q2 and Q3), we gave out 150% and in the fourth quarter we gave 125% of the variable.
In the first quarter of 2010-11, we have given 100%, which is the full variable. That is one kind of lever that we have which peers don’t,” Ajoy Mukherjee, global head, (HR), TCS, told ET.
The Tata group firm does not have an Esop policy and instead compensates senior executives with higher pay. Last month, Infosys issued five equity shares to every employee and one more share for every year in the company to its lakh-plus staff to ring in its 30th anniversary.
MindTree bags UID deal to develop applications
Software services company MindTree on Thursday said it has bagged a multi-crore IT deal from the Nandan Nilekani-headed unique identification project (UID).
As part of the deal, MindTree will develop and maintain applications for the UID project, also known as Aadhaar, the company said in a statement. The exact financial details of the contract were not available. The application will capture and manage data from different sources.
Capgemini buys UK-based company
Capgemini, the Paris-based information technology (IT) consulting, services and solutions provider, today announced that it had acquired all of UK-based Strategic Systems Solutions (SSS) to boost its presence in the capital markets sector and add new platforms in China and the Philippines.
Prior to the acquisition, Capgemini owned 49 per cent of SSS, and now it will fully integrate SSS with its capital markets unit. The acquisition will strengthen Capgemini’s presence in the capital markets sector and provide added strength in the Asia-Pacific region, with IT and BPO (business process outsourcing) platforms in the two countries.
It will reinforce its presence in Singapore. Capgemini has more than 23,300 employees in India. Founded in 1995 and headquartered in the United Kingdom (UK), SSS is recognised in the capital markets sector and employs 670 professionals across the UK, US, Singapore, China and the Philippines.
Cognizant buys Paris-based Galileo Performance
Cognizant, a Nasdaq-listed information technology (IT), consulting, and business process outsourcing services company, today announced the acquisition of Galileo Performance, a Paris-based provider of IT-testing consulting services. The terms were not disclosed.
Galileo helps leading companies in France optimise and extend business performance through IT system measurement, management and testing. It will complement Cognizant’s fast-growing global testing practice, with its 10,000 testing professionals, while strengthening Cognizant’s existing business presence in France, according to Cognizant’s statement.
Infosys to set up another centre in Tamil Nadu
Infosys Technologies, the country’s second-largest information technology (IT) services exporter, has approached the Tamil Nadu government for 200 acres of land near Chennai for setting up a development centre, according to a senior state government official. The Bangalore-based company confirmed talks with the state government representatives, but refused to comment further.
The official said Kris Gopalakrishnan, chief executive officer and managing director of Infosys Technologies, met Deputy Chief Minister M K Stalin on Monday discussed on the company’s future expansion in the state.
Pay hikes for all Satyam staff next month
Information technology company Mahindra Satyam [ Get Quote ] (earlier known as Satyam Computer Services Limited) is likely to announce a pay hike for all its employees on July 1.
This, according to a top executive of the company, follows Mahindra Satyam's annual appraisal process 'ASPIRE', which begins in April and ends in June.
"It is progressing as scheduled," the executive said. The exercise applies to the entire 25,000 associates (as Satyam calls its employees) and will be communicated internally to the company's leaders on June 21.
While declining to share the final quantum of the salary revision, he said: "We haven't closed the loop internally, as yet. The pay hike will be announced on July 1.
"The company is also in the process of hiring 1,000-1,500 laterals (or experienced hands) in "sync with its growing business", said the executive.
"Recruitment of 3,000 freshers is now more or less concluded and the next thing we are going after is laterals, which is going as per the schedule.
"We will be having about 1,500 laterals on our rolls this quarter and the next quarter. Given the growth, we may continue to hire more in the coming quarters," said the executive.
Key leadership hiring in different pockets -- a few from other companies -- to beef up the company's sales efforts is currently on, he added.
Wins from new and existing customers continue across various continents from a multi-year contract with an auto major in Japan [ Images ] to government accounts in Singapore, from a global energy drink giant in Australia [ Images ] to a retail chain major in South Africa [ Images ] and from an electricity and water management authority in West Asia to major banking institutions in Europe.
Additional business from large customers in the US is also helping augment Mahindra Satyam's position in the market, he added.
Experts' take on how India Inc handled layoffs
Mohandas Pai, DIRECTOR, HUMAN RESOURCES, INFOSYS:
You have to look at the layoffs within the context of the fear of a global financial crisis and an impending deep recession. After our annual performance appraisal last year, we let go of about 3% of people as compared to 1.5-2 %. In a good year, when people rank poorly, they tend to leave on their own. However, that wasn't the case last year as there weren't many jobs available. It was a gut-wrenching decision, but it had to be taken. We kept people on the bench for a longer time, and doubled our investment in training and education during the period. This year we are looking at hiring about 30,000 people.
Manish Sabharwal, CHAIRMAN, TEAMLEASE:
There is a new normal in the industry as companies are realising that they can do far more with less people. When the tide was high, hiring standards had gone low and companies had started converting variable costs into fixed costs. This resulted in low productivity which came back to bite them when things got bad. Companies are still not back to hiring the way they did in the past. Over the last few months when companies say that they have been hiring, it means that they are no longer firing people. The upside to all of this however is that companies are now focussed more on quality and the productivity of the employee.
Ganesh Shermon, PARTNER AND COUNTRY HEAD OF PEOPLE AND CHANGE PRACTICE, KMPG:
Companies often use the 'saving jobs' rationale to justify retrenchment. They say they are letting go of 500 people as a way of saving the remaining 3000 people. However, the way they have gone about doing this has left a lot to be desired. Many companies hired in the previous year based on predictions of growth, but it was a forward hedge that went wrong. Companies that fired people in a huff now find themselves in a situation where they have to go out and hire people at a far higher remuneration , and are still finding it difficult to attract the right kind of talent.
N S Rajan, PARTNER, NATIONAL HEAD & EMEIA LEADER - PEOPLE & ORGANISATION, ERNST & YOUNG:
When you are trying to save an organisation, there is a very fine line be tween whether you need to do something or not. When it comes to letting go of people, there are only certain situations, when the company is faced with bankruptcy or is restructuring to avoid going under, that layoffs deemed acceptable. There is a relatively simple quid pro quo between reducing the number of people and saving costs, but has deeper implications. As you slice layers from the organisation, you lose not only the individual, but also his collective years of experience within the organisation. The employer brand also needs to be safeguarded. Layoffs, done as a first resort without compassion, have a negative impact on employee engagement among the people who are still at the firm, often leading to the best talent leaving the organisation.
Source: EconomicTimes
IT cos hire non-techies to cut costs
When Ishwar Prasad graduated from a Mysore college two years ago with specialisation in commerce, a career with one of India’s top three technology firms was nowhere on the agenda.
However, Prasad went on to do a six-month diploma in computer hardware management last year and is now helping some of the leading telecom companies in the world manage their computer desktops and other infrastructure, from a remote infrastructure management centre at the tech firm.
As tech firms automate their commoditised service offerings, they do not necessarily need engineers to perform all tasks. Instead, they are increasingly hiring non-engineering graduates such as Prasad for testing software applications and managing computer infrastructure of their clients in order to do more with fewer staff and at lower wages than computer engineers.
From nearly 10% of their current workforce, non-engineering graduates could account for nearly 20-25% of the staff at companies such as TCS, Wipro and HCL, over the next one to two years. Multinational rival Cognizant already has almost 20% of its global workforce who are non-engineering graduates.
Prasad is among thousands of non-engineering graduates being hired by companies such as Tata Consultancy Services (TCS), Wipro, HCL and Infosys for performing highly automated tasks of software testing and computer infrastructure management with the help of user-friendly, readymade platforms that can serve multiple customers.
“In my hometown, working for Infosys or Wipro makes parents proud. I could have never got into such companies with a commerce degree, but now many of my relatives think I have made it big and become a software engineer,” says the 27-year-old.
Companies such as Wipro are already readying their strategies for shifting nearly 40% of software services to readymade templates that can serve additional customers without having to hire incremental staff.
“The prime impact of these delivery models is the asset-based view as opposed to a labour-based one, that is, less number of people for the same work and an increase in operating margins per employee, while simultaneously reducing capital expenditure for their clients. The impact on employee mix (those with a BE degree vis-a-vis non-BEs) will be there but will not be applicable for all technologies and domain areas,” said Saurabh Govil, senior vice president HR, Wipro Technologies.
For years, India’s $50-billion software exports industry has been hiring thousands of engineering graduates every year for writing software codes and processing back office tasks for top customers such as General Electric, Citibank and JP Morgan Chase. However, increasing wage inflation and rising attrition has forced them to seek ways to arrest linear growth.
Intelenet to hire 7,000 in India
Leading BPO services provider Intelenet Global Services has said it plans to expand its footprint overseas and hire around 7,000 personnel in FY '11.
"The IT sector is expected to grow at 15-20 per cent and so is the BPO sector. With the US economy back on the recovery path, we expect double-digit growth as against four-seven per cent last fiscal. We are, hence, planning to expand our business and hire more people. We plan to hire 7,000 personnel across the country this year," Intelenet CEO Susir Kumar said.
Currently, Intelenet employs over 32,000 people across the globe at 35 delivery centers at strategic locations. It has a headcount of 18,000 in India.
Mumbai-based Intelenet, that operates its BPO arm under BSE-listed Sparsh BPO, also plans to open more offices overseas and is focussing on markets such as China, the Middle-East and South America.
"The emerging markets such as the Middle-East, China and Latin America have tremendous potential. We are planning to open a few offices there. Besides, we are also looking at expanding our domestic operations to Tier II and III towns," Kumar said.
He, however, refused to divulge details on how many offices it plans to open and the amount of investment to be made in fiscal 2010-11.
Intelenet, with a global turnover of $350 million, already has offices in the US, Poland, the Philippines, Mauritius, the UK and Australia, to cater to the needs of several Fortune 500 companies there.
The company, which provides BPO solutions on banking and financial services, travel, hospitality and telecom, has recently added manufacturing services to its portfolio. It has over 90 clients across these sectors.
Desi IT co bags $4.5 mn UAE contract
Software developer Valuemart Info Technologies bagged a $4.5-million (Rs 20 crore) contract from the UAE-based Supreme Software Technologies to develop a project help desk solution, the Bangalore IT firm said.
"The project help desk suite is an enterprise web-based solution for electronic monitoring of project-related processes. The solution helps an enterprise to track workflows of multiple projects and ensure their completion within timelines," Valuemart managing director C K Vasudevan said.
The company will execute the order within two years to facilitate Supreme Software manage multi-location project teams, including those working on offshore and onsite models.
"Supreme Software awarded the contract after we successfully demonstrated the functional aspects of the suite as a proof of concept. The deal will also enhance our ability to bid for high value projects and move up the value chain," Vasudevan said.
The 13-year-old Valuemart offers enterprise resource planning (ERP) and business process management solutions in diverse verticals such as manufacturing, banking, financial services, insurance and legal.
Cost cutting helps Sony cut losses
Sony Corp reported a smaller loss than the company forecast, citing bigger-than-expected cost reductions and gains from its life insurance unit.
The net loss was 41 billion yen ($445 million) in the year ended March 31, narrower than the 70 billion yen the company had previously projected, Tokyo-based Sony said in a statement today. Sales were 7.21 trillion yen, or 1.2 percent lower than forecast, according to the statement.
The maker of Bravia televisions and Cyber-shot cameras has eliminated 20,000 jobs and shut factories to weather the global recession, which led to Sony’s first back-to-back annual loss since its listing half a century ago. Chief Executive Officer Howard Stringer is counting on a recovery in global demand for electronics to revive earnings growth this year.
Sony shares gained 0.7 percent to close at 3,080 yen on the Tokyo Stock Exchange before the company reported preliminary results. The stock has gained 15 percent this year, outperforming the benchmark Nikkei 225 Stock Average.
Cognizant promotes 15,000 globally
It's raining benefits at Cognizant! First, the company paid out about 200% bonus in March to a cross section of its employees. Now, the company is promoting about 15,000 of its associates globally who are below the 'manager' level.
The company has sent out letters of promotion to 15,000 employees on Friday that will take effect from May 1, 2010, sources said.
ToI has also learnt that this is just the first round of promotions and a second batch of promotions for people above the 'manager' level will happen in May. It is learnt that a sizeable chunk of the employees in that level are also likely to see themselves redesignated to a higher level. These employees would receive a fair chunk of pay hikes as well, sources added.
The company has 78,400 employees. This is the single largest number of promotions announced by any IT company in India this year. Last month, Infosys had announced promotions for 7,500 employees.
"This morning we announced global promotions for associates below the level of Manager. These promotions would be effective May 1, 2010. Cognizant's industry-leading growth over the past year has enabled promotion and career growth opportunities to a record number of employees," said Gordon Coburn, chief financial and operating officer, Cognizant in an e-mail.
Apart from the email, company officials remained tightlipped about any of the announcements including a hike in the salaries.
Infosys IT Inc's biggest paymaster in 2009
Unveiling plans to hire 30,000 persons this fiscal, IT bellwether Infosys today said it has paid $134 million (nearly Rs 600 crore) in salaries in 2009-10-the highest amount in the IT industry's history in India in a year.
Infosys HR head T V Mohandas Pai said the company has already made 19,000 campus offers for fiscal 2011.
Talking to reporters, he also said Infosys envisages recruiting 1,000 personnel each for its China and US offices and around 400 in Manila, he said. The company plans to induct 5,500-6,500 laterals, he added.
"There has been a large wage increase for middle and junior level employees. At the senior level, there has been a 10 per cent increase in wages. Overall, the average wage hike has been around 14-17 per cent," he said.
Nearly 7,500 persons were promoted by Infosys during the past year, out of whom 2,500 had been impacted by the company's new employee restructuring programme, called I-Race.
As per the restructuring programme, which aimed at fitting employees into roles they were prepared for, nearly 4,500 employees had been fitted in a role lower than what they were earlier fitted into. 0ut of these 4,500 personnel, 2,500 have now been promoted and the remaining 2,000 might be promoted in October.
Indian cos' hiring activity picks up 1.5 % in March
India Inc's hiring activity picked up 1.5 per cent in March, led by IT-enabled services, insurance and auto sectors, a report by job portal naukri.Com has said.
Job portal naukri.Com's monthly Job Speak survey reflected renewed optimism among recruiters, with the new job index moving up to 962 in March compared to 947 in February.
The portal takes into account not only the jobs posted online by its clients but also those made by them with the help of the website's tele-calling team.
"The hiring intentions of companies in most industry sectors seem to be moving in a positive direction as reflected by the consecutively upward moving Job index in the first quarter of 2010. It seems 'cautious optimism' among employers has given way to definite optimism," said Sumeet Singh, the National Head (Marketing and Communication) of Info Edge, which owns the website.
Hiring in ITeS and insurance sectors have seen maximum movement with the index moving up by 13 per cent and 15 per cent respectively in March over the last month.
Recruitment in auto sector moved up by 8 per cent and in pharma sector by 7 per cent in March, the report said.
Professionals in production, banking and HR also witnessed an increase in hiring by 8 to 12 per cent in March over February, the report said.
Overall, the index seems to be moving in a robust manner with hiring moving up across all industry verticals, functional areas and cities.
Among cities, Delhi have emerged as the most bullish on hiring, with the city-wise job index moving up 13 per cent over the last month.
iGate to hire 500, eyes acquisitions
IT services company iGate said it will hire 500 professionals in the next two quarters to support its expanding operations.
"Most of the 500 people we plan to hire in over the next six months will be in India and some in Mexico and the US. They will be employed in both services in BPO areas," iGate CEO Phaneesh Murthy said.
The Nasdaq-listed company, which has been eyeing acquisitions in $30-70 million range for some time, is hopeful making it in 2010.
"We are aggressively pursuing it... We have $100 million cash on our balance sheet. We are eyeing acquisitions in $30-70 million range and we should finalise it in few months," he said. The company is looking at healthcare and financial BPO services.
There is a large pent-up demand... I think the bigger recovery is in the financial services," he said.
iGate said its net income more than doubled to $11.6 million for the January-March quarter compared to compared to $5 million registered in the same period last year, Murthy said.
Revenue was up 29 per cent at $57.9 million for the quarter ended March 31, 2010, compared to $44.8 million during the same period last year, he added.
iGate Chief Financial Officer Sujit Sircar said, "While we had an excellent performance in Q1 and expect revenues to grow, margins are likely to be under pressure due to increased hiring, rupee appreciation and wage inflation. Our cash and cash equivalents and short-term investments crossed the $100 million mark."
The company ended Q1 with 7,357 employees, a net addition of 447 employees during the quarter. Seven new customers were added by iGate during the quarter.
MphasiS to buy Fortify for $15m
MphasiS has signed a definitive deal to acquire 100 per cent stake in Fortify Infrastructure Services (FIS), a provider of offshore based Remote IT Operations and Management (ROM) Services, for $15.5 million in an all cash transaction.
With this acquisition, MphasiS – which is an IT solutions, services and BPO provider in application development, system integration, product implementation, consulting services – believes that it will be able to provide outcome based services that go beyond technical SLAs.
Ganesh Ayyar, CEO of MphasiS, said, “This acquisition will catapult us ahead as a provider of offshore-based ROM services. Mid market customers are looking for partners to solve the challenges of operating and managing their IT. We see this as our sweet spot to provide cost effective and outcome based ROM services.”
In a press release, MphasiS said that this acquisition will give it access to marquee customers, an experienced management team, a talent pool of highly specialised professionals and a proven platform to provide ROM services.
Rajkumar Velagapudi, CEO of Fortify Infrastructure Services, said, “Our proven industry track record in providing outcome-based ROM services, coupled with MphasiS’ rich expertise and leading offshore capability will provide mid market customers a flexible, high-value operations management platform that is focused on achieving their business objectives.”
FIS has presence in India and the US with 250 employees.
CSC under scanner for 'exploiting' Indian IT professionals in Denmark
The Indian subsidiary of the world’s fourth-largest IT services provider, the $16.7-billion Computer Science Corporation (CSC), is under scanner for allegedly exploiting Indian IT professionals sent onsite to Denmark.
Source: EconomicTimes
The accusation comes from a local IT workers’ union, which claims CSC is paying Indian IT professionals in Denmark salaries lower than the minimum stipulated by law.
PROSA — a Danish trade union for IT professionals — raised the issue last month when an Indian IT professional on deputation in Denmark, protested about not being paid the salary promised by CSC. The issue is creating headlines in the Nordic country, which has about 65,000 IT professionals.
According to papers filed by PROSA with Danish investigating authorities, CSC pays Indian IT professionals between 5,000 and 8,000 Danish Kroner (DKK) a month — roughly equal to what the Indian IT workers would get, working in Noida or Hyderabad. (One DKK is equal to Rs 8).
But Danish law states that foreigners must earn at least 31,250 DKK monthly to enter the country through the so-called salary amount rule, which is part of the Aliens Act. “Danish law requires companies to pay foreign IT workers in Denmark a minimum wage of 31,250 DKK, which is roughly equal to Rs 2.5 lakh per month, to enter the country. We believe more such IT companies are involved in exploiting Indian IT workers onsite,” said Hanne Lykke Jespersen, union secretary, PROSA. “The Danish government has already launched an investigation into this matter,” she added.
To give a comparison between the cost of living in Denmark and India, a McDonald’s Big Mac (called Maharaja Mac here) costs $1.5 (Rs 69) in New Delhi. The same Big Mac costs about $5.7 (Rs 250) in Copenhagen. In another comparison, per capita income in Denmark is about $3,000 per month. In contrast, Indian IT workers are often paid even lower, at about $1454 per month (equating with 8,000 DKK per month), going by PROSA’s claims.
Source: EconomicTimes
TCS to hire 30,000 in next fiscal
IT major, Tata Consultancy Services (TCS), today said that its growth momentum in the last quarter of this fiscal would be better than the previous quarter and that the entire IT industry would see an improvement in the deal pipeline.
"The growth is definitely there and we should stick to what we have said earlier...The growth momentum in the last two quarters will continue this quarter also but we have to see whether it will be better than those during the boom days," TCS Chief Financial Officer and Executive Director, S Mahalingam, told reporters on the sidelines of a CII-IFRS summit here.
On increments to its employees, Mahalingam said that the company would be announcing the same around April but he would not be able to divulge the quantum now.
The TCS official, however, said that it would definitely be as per industry standards and keeping in view the prevailing economic scenario.
Mahalingam said that the company has planned to hire 30,000 personnel in the next fiscal.
Infosys to give ‘unheard of’ increments
Infosys Technologies has been seeing a churn of employees in the past three quarters. The churn began after new HR initiatives, including a career-determining programme called iRace, were started.
Several thousand dissatisfied employees have quit since October. Though no official count is available, employees put the number of exits since October at over 10,000. This has forced the company to make some changes in its HR policies. One of the changes is believed to be good salary increments this time.
Some of the other changes are: Delinking the average working hours every quarter from iRace and appraisal, and scrapping the requirement of completing two compulsory internal certification programmes.
A Hyderabad-based employee quoted the HR head, Nandita Gurjar, as saying that salary raises unheard of in the company would be given this April. Gurjar was not willing to tell Financial Chronicle the size of raises; but employees expecting hikes in the range of 5 per cent to 13 per cent.
The problem HR plan – iRace (short for Infosys role and career enhancement) – introduced last June, defines roles, competencies and proficiency requirements, while linking career movements to performance and business focus. FC had then employee apprehensions about the programme.
In the past two months, Infosys employees have been rushing to the internet, and the blogosphere, in particular, as well as the company intranet with lambasting iRace. Cartoons, videos on Youtube and fake interviews have also been posted.
This led Gurjar to post her comments on the internal blog. She said, “Of late I have noticed a disturbing trend wherein employees leaving the organisation write mails about it in disparaging terms, and existing employees take joy and pleasure in circulating these mails among themselves and even outside.”
“I feel deeply hurt when I hear of such incidences. It makes me wonder, would we behave in this way if someone spoke similarly about our friends, family or country...? At what point do we move from being a bystander enjoying the fun to be an owner who takes offence at this kind of behavior?’’
According to employees, of the over 10,000 that have quit since October, 4,000 left in February. About 1,000 e-separations were filed on the intranet on a single day: December 31. Gurjar though says that only 1,200 people quit in January, 1,104 in February; and a slightly higher number of departures were expected this month.
An employee based in Bangalore said, “iRace is the reason for the exodus. After the implementation of the programme and other policies like 9.15 hours of compulsory attendance, people now dread to work in the once dream company.”
Asked about the iRace effect, Gurjar told FC that employees had confused it with promotions and linked it to the slowdown.
“The career architecture has nothing to do with promotions and is more to do with skill mapping. Employees have to remember that promotions and hikes are a result of growth and they will grow only if the company grows. Earlier, when Infosys was growing at 40 per cent plus, raises and positions were attuned to that kind of growth. The cycles now will be more relevant to today’s growth rates,” she said.
She added that the company had now started communicating the initiative and employees were beginning to understand the positives. The employee angst notwithstanding, HR consultants feel rationalisation will continue. It could benefit both company and employees in the long run.
P Thiruvengadam of Deloitte India said, “Rationalisation of the career structure is a common phenomenon in most mature organisations. While companies are young and growing rapidly, they reward employees that way too but after they reach 20-30 years and saturate, they are more conservative.”
According to Kris Lakshmikanth of The Head Hunters India, different IT companies deal with the problem of inefficiency and excess fat in different ways. Infosys had chosen this method, which was facing trouble maybe because of the timing of its launch, he added.
Source: mydigitalfc.com
