Thursday, February 19, 2009

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Satyam recalls 1,500 onsite staff as clients call off contracts

As clients canceled contracts with troubled Satyam computers, more than 1,500 employees of the company working overseas have been called back to India. Followed by Rs. 7,800 crore scam in Satyam, many foreign clients have terminated their contract with the company, reported The Economic Times.

About 170 employees who were working for State Farm Insurance, an Illinois-based insurance company, have already returned to Satyam headquarters in Hyderabad, as State Farm Insurance terminated the contract with Satyam. Most of the employees were technical and support staff that were involved in delivery management and support. "The disengagement took place in an abrupt manner. Satyam staffers were not allowed to access the computers and their belongings after termination of the contract," said a Satyam executive.


According to the company executive, some other larger clients such as Philadelphia-based Cigna Corporation, Melbourne-based Telstra, Sydney-based Qantas airlines and Atlanta-based Coca-Cola have also started disengaging from the company, resulting in over 1,500 employee redundancies across Satyam's onshore operations in the U.S. and Asia Pacific. Satyam finds more than $300 million revenue from these four clients.

Indicating further cost-cutting measures in future, another senior executive of Satyam said that there would be a lot of restructuring as business overseas has been severely impacted and hence workforce rationalization is definitely on the cards. "Investments in training and development and infrastructure will be brought down significantly," executive added.

Employees, concerned over the future, have started to approach various employee organizations to resolve the problem. For instance, UNITES, an organization working for the rights of IT employees has received several queries from Satyam employees based in U.S., UK and Japan about how they should go about finding a solution to the current crisis.

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