Thursday, April 30, 2009

TCS drops plan to raise headcount in Australia

Global IT major Tata Consultancy Services (TCS) is understood to have shelved plans to increase its headcount in Australia to around 2,000 by the end of this year. The reason: The ongoing financial crisis.

TCS had dropped plans to boost its headcount in Australia even though it recorded double-digit revenue growth, according to reports and blog posts from the country.

The Tata group company employed around 950 people in Australia at the end of the previous year, but around 50 have since been relocated to India. This puts TCS’ total employee base in that country at around 900, reports say.

A TCS spokesperson said: “Australia continues to be a significant growth market for TCS. Given the uncertainty in the global economy, TCS will grow its staff strength in line with the business growth there. Under the current context, with customers looking at offshoring as an effective value proposition, we are likely to see an increase in people servicing Australian customers in India.”

In January, TCS Asia-Pacific Head and Regional Director, Girija Pande, had said that the company planned to double the number of workers in Australia by the end of the year.

In Australia, TCS provides near-shore, high-profile technology services.

Birlas shift BPO jobs to India

Faced with high costs and falling demand, the Aditya Birla group is shifting part of its back-office operations from Canada to India. Aditya Birla Minacs, the group’s BPO firm, has closed down its three centres, with a capacity to house 1,200 people, in Canada.

The company downed shutters of units at Pickering, Saskatoon and Chatham in Canada. Aditya Birla Minacs, which was acquired by the Birlas from the Minacs family in Canada in June 2006, is a division of the group’s
holding company Aditya Birla Nuvo. The company has 12 centres in Canada. BPO and IT business together constitute 13 per cent of Aditya Birla Nuvo’s total revenues.

India Inc may hike salaries by 6-8% in 2009: Mercer

Source: TheEconomicTimes
At a time when the global job scenario is gloomy, India Inc is expected to increase salaries up to eight per cent this year with infrastructure and FMCG sectors likely to see the maximum hikes, global HR consultancy Mercer says.

"Overall Indian companies are likely to increase salaries between 6 and 8 per cent in 2009," Mercer India business leader (information product solutions) Gangapriya Chakraverti told reporters.

Despite the economic slowdown troubling the corporate world, the country's fast moving consumer goods (FMCG) and Infrastructure sectors are likely to see the highest increases in salaries this year.

"Sectors like FMCG and infrastructure are expected to get the highest hikes of 8-12 per cent this year," Chakraverti added.

Meanwhile, financial services and Information Technology sectors, which have been severely impacted by the global slowdown, are unlikely to see any considerable increases in wages this year.

"IT and financial services may be the worst hit ... IT sector may see an average salary increase of four per cent this year," Chakraverti added.

With the beginning of the new financial year, companies are now drawing up plans related to the salary increments. However, in the wake of the severe economic conditions firms are looking for ways to answer the HR challenges in a balanced manner.

Mercer, which provides HR consultancy services to companies, has launched a new product for its clients to provide quarterly information such as changes in HR budget, staff turnover, headcount growth and planning, changes to benefits and incentive plans.

The services also include first-hand market information on how companies plan to address a specific hot issue as well.

Interestingly, focus on performance has been enhanced substantially following cost-cutting initiatives introduced by companies amid the slowdown.

The trend is shifting towards a greater difference between salary increases for the high performing individuals and the average performers.

CBay Systems to double headcount in India in 18 months

Leading global medical transcription (MT) company, CBay Systems plans to scale up its operations in India. "We will double the headcount in India in the next 18 months," said Mr Dinesh Kumar, Director and COO – India Operations, CBay Systems, after inaugurating its captive centre here on Wednesday.

Now, it has 3000 captive seats with centres in Mumbai, Pune, Nagpur, Bangalore, Hyderabad and Vijayawada. In 2009, the company will be investing Rs 45 crore for creating 1800 new seats. He said the company has just completed two satellite units each in Bangalore and Hyderabad.

The new facility on 18,000 sq is located at Rathinam Technopark of Rathinam Techzone Campus, Eachanari. "In three months, the centre entailing an investment of Rs 11 crore will start functioning with 450 seats," Mr Kumar said.

Goodyear eliminates 3,800 jobs worldwide amid loss

Goodyear Tire & Rubber reported Wednesday a first-quarter loss and said 3,800 jobs had been cut under a restructuring program aimed at putting the US tire maker back on the road to profits.

Goodyear said it had a first-quarter net loss of 333 million dollars, or 1.38 dollars per share, in line with analyst expectations. It was the second consecutive quarterly loss for the Akron, Ohio-based company, which had swung into a full-year net loss of 77 million dollars in 2008 as US auto sales plunged amid a recession and tight credit. A year ago, Goodyear posted net income of 147 million dollars, or 60 cents per share.

Adobe freezes pay, cuts variable

Adobe Inc, the world’s biggest maker of graphic-design software, will freeze pay this year as the recession crimps sales, said Chief Financial Officer Mark Garrett. “Clearly, we aren’t going to have salary increases,” he said in an interview. “The bonus plans and variable compensation plans will pay out less. We have set ourselves up for what we think we need to do -- from a costs perspective -- for the rest of this year.”

Adobe also has cut about 8 per cent of its workforce, curbed travel and reduced its use of contractors. While US demand is now steady, overseas sales may still be dropping, Garrett said. That revenue accounted for almost 60 per cent of Adobe’s total last year.

SAP's Q1 misses forecasts

Germany's SAP posted a worse than expected 8 percent fall in its first-quarter operating profit on Wednesday, as software revenues slumped, and told investors not to expect an upturn before next year.

Leo Apotheker, who shares the top position at SAP with Henning Kagermann until June, said the first quarter had been the "toughest quarter since World War Two". But, speaking on CNBC, he added: "Hopefully we will see an upturn in 2010".

Yahoo! India lays off 60; to hire 130

Global search engine player Yahoo!, which recently announced a five per cent lay-off globally, is learnt to have asked around 60 employees from its Bangalore-based R&D centre to quit the company.

The California-based company is also planning to hire 130 professionals in India in areas like product engineering.A company spokesperson, however, declined to comment.

Sources said the recent announcement of Yahoo!’s global layoff, will impact less than four per cent of Yahoo! India R&D’s workforce, which at present is 1,500. A significant number of the employees are being laid off on performance grounds, and some of them on account of reorganisation, leading to their becoming functionless.

This move would allow the company to focus on strategic priorities and provide flexibility for targeted hiring in key business areas, they said. Yahoo! would continue to hire in business-critical areas, in India.

The company currently has over 130 openings, sources added. This is the second lay-off Yahoo! India will be undertaking following global announcements.

In December 2008, the company had served notices to three per cent of its India workforce due to the ongoing slowdown.

Last week, the company had said it would lay off nearly 700 workers, or five per cent of its workforce.The company has been on a cost-cutting drive since Carol Bartz took over as CEO in January.

It has taken steps to focus on fundamentals as it seeks to revive growth in a tough economy and with fierce competition from Google Inc.

IBM India awarded contract by HDFC Bank

HDFC Bank, a private sector bank in India, has announced an agreement with information technology company IBM India to build a cost-effective IT framework that will support its strong business growth. According to the company, the collaboration will enable HDFC Bank to keep its credit card processing requirements in-house while offering uninterrupted service to its customers. It will also eliminate additional investments in data centre costs and offer the option to migrate other HDFC Bank applications, such as core banking, to System z mainframes.

The collaboration is also expected to benefit customers by adding more features on existing credit card products, enabling higher processing speed and quicker response time. It will also scale up the customer service process and enhance interfacing capabilities with other applications, leading to more features on self-service channels like Internet.

Bizerba India signs up IBM PartnerWorld Program

Leading retail solution provider Bizerba India has announced that it has joined the IBM PartnerWorld Program. According to a company press release, Bizbera will work closely with IBM India to provide a one stop solution to retailers across the country.

Another round of layoffs at Clear Channel

The parent of radio-station owner Clear Channel Communications Inc. is laying off about 590 people nationwide, including about two dozen in Colorado.

The layoffs follow 1,850 job cuts nationwide by CC Media Holdings Inc. on Jan. 20. Locally, the latest layoffs affect mostly part-time workers. The company also said it would suspend its match of employee 401(k) retirement-plan contributions unless it reaches 90 percent of its year-end targets, the Wall Street Journal reported.

Hutchinson Tech cuts another 300 jobs

The city of Hutchinson was dealt a devastating blow as its largest employer announced a new round of job cuts--mere months after laying off nearly 1,000 workers.

A spokesperson for Hutchinson Technology says the company cut 200 jobs at its Hutchinson location, 39 from its Plymouth location, and 61 from its Eau Claire, Wis. plant.

Angie Jergens, owner of the popular Hutch Café on Main Street, says she’s had to cut staff after the disk-drive parts maker announced the first major layoff in January.

Mega UK outsourcing deals come calling

A few weeks after TCS won a contract from the UK’s Child Maintenance and Enforcement Commission (CMEC), another state-owned organisation Transport for London (TFL) is seeking vendors for an outsourcing contract worth around $100 million, as the country’s transport organisation seeks to consolidate its information technology helpdesk and serve around 30,000 of its staffs better.

The contract is the second in a series of deals worth around $2-3 billion being pursued by offshore service providers, including TCS, Infosys and Wipro from the UK’s state-owned departments. When contacted by ET last week, a spokesperson at TFL said his organisation would be open to work with offshore outsourcing firms.

The UK aims to save almost $10.6 billion annually by lowering costs of back office and IT operations across its state-owned departments, and outsourcing could help the country achieve these savings, according to experts.

Wednesday, April 29, 2009

KPIT freezes new recruitments, cuts variable pay by 50%

Mid-size IT firm KPIT Cummins Infosystem has frozen fresh recruitments for next three-four quarters given the turbulence in its core verticals of automotives and manufacturing. Moreover, the company has reduced variable pay component of employee salaries by over 50%. This forms a part of company’s strategy to control internal costs to protect margins at a time when new business is hard to come. The variable pay on average forms approximately 12% of total salary for KPIT employees.

“We are keeping a tight lid on our headcount. We will not be increasing the current number of employees for at least three-four quarters,” said Ravi Pandit, the company’s chairman. He also confirmed that as many as 290 employees in KPIT’s development team were let go in the three months ended March 09.

Pune based KPIT earns more than four out of every five rupees from the manufacturing vertical. The current global economic slump has impacted various segments of manufacturing industry. This spells trouble for future growth of KPIT Cummins.

“We have not provided for future performance guidance given tough times for manufacturing clients. There is no certainty about growth in revenue for the current year. However, we are trying to retain our margins by increasing productivity and cutting costs,” said Mr Pandit.

To improve productivity, KPIT has increased share of revenue from offshore activities and fixed price contracts. Offshoring revenue relative to total revenue has increased from 53% a year ago to 56.6% in the March 09 quarter. Since costs of project execution are lower in offshoring, it provides better margin compared to onsite projects. Fixed price contracts also tend to offer better realizations compared to time based pricing method. For KPIT, share of revenue from fixed contracts has gone up from 12% a year ago to 26% in the March 09 quarter.

The company declared its results for the quarter and the year ended March 09 last evening. During the quarter, revenue grew by 1.6% to Rs 209.8 crore from the previous quarter whereas net profit jumped by 14.5% to Rs 193.2 crore due to lower forex losses.
Courtesy: TheEconomicTimes

Nokia to cut 400 more jobs

Nokia Oyj, the world's biggest mobile phone maker, said on Tuesday it would reduce investment in creating new services, helping it to cut further 450 jobs. Nokia, which made its first ever quarterly pretax loss in January-March, is cutting annual costs at its key handset unit alone by more than 700 million euros ($911 million) to counter plunging demand.

Nokia said the 450 job cuts would also involve internal IT unit and industry collaboration activities. It has so far slashed 3,000 jobs across the organisation. The overall mobile phone market is expected to shrink 10 per cent this year, as consumers rein in spending and handset sellers try to clear out unsold phones.

Massive layoff notice at Convergys callcentre in Canada

Related Story: Call centre layoffs climb
Nearly half of all employees at the Convergys call centre in Kamloops could be looking for work by the end of June. According to Convergys officials, the company plans to lay off 240 employees, effective June 30. Amy Williams, a spokeswoman for Convergys, told KTW the layoffs are the result of an anticipated decrease in call volume because of "a change in client business" at the site.

While Convergys wouldn't say who the client is, a source told KTW the company is credit-card giant American Express, and employees working on its account, including management, will be let go. It is unclear if the layoffs effect full-time or part-time employees. The company told staff the news on Wednesday.

Williams said Convergys is actively looking for a new customer to serve the centre, which could negate the layoff. "If [a new customer] could be found, and we could get a deal before the June 30th date, but I can't speculate on that," she said.

She also noted the company is offering severance packages to employees. There are currently 600 employees at the Valleyview call centre. The company at one time was the largest private employer in Kamloops.

Last year, rumours swirled around possible closures of Convergys call centres after its CEO hinted the company might close unprofitable sites in Canada. As it turned out, its Red Deer operation was closed.

Mayor Peter Milobar said he hopes the impact of the layoffs will be "negligible" and the city can absorb them. "It's definitely not a good thing... obviously for the 240 people affected it's a very significant impact to their lives," he said.

He also downplayed the suggestion the layoffs are a sign Kamloops is being pulled into the worldwide economic crisis. Milobar maintained other major employers in Kamloops in areas such as the health and education sector, along with the likes of Domtar in the forest industry, are still doing well.

He also said because of its U.S. based customers and the trouble in that country's economy, it was always a question mark as to how long Convergys wold be able run at current levels.

This week, the Cincinnati Enquirer reported that the Cincinnati-based Convergys may look to break up the company this year:

"Spinning off the company’s struggling information management unit has been on the table for several months, but in January, CEO David Dougherty said the economic slowdown and turmoil in financial markets made it unlikely the company would split off the unit in the near-term," the newspaper reported.

"But it will be on agenda for management and the board this year as the Cincinnati-based company looks for ways to boost the value of its share, Dougherty said at its annual shareholder meeting today.

"Convergys is also struggling with a recession-related drop in call volume at its call centers, said Chairman Philip Odeen."

HCL BPO signs 5-yr deal with UK water utility

HCL BPO, a division of HCL Technologies, has signed a five-year deal with a Britain-based water utilities client that has around 5,000 employees. As of now, the company has less than 100 people working for the client, but it expects to add more by June-end. HCL is also in talks with four other potential water utilities in the UK and Europe as well as some energy utilities.

Swine flu: IT majors closely monitoring Mexican centres

On high alert:
  • TCS is advising employees in Mexico City and San Luis Potosi to work from home
  • Wipro Ltd is in the process of providing required travel advisories for affected locations
  • Infosys has been monitoring the situation closely
  • Genpact has taken “proactive measures to protect local employees”

With swine flu outbreak in Mexico now triggering fears of a global pandemic, Indian IT companies – which have operations in Mexico – have swung into action. While Tata Consultancy Services (TCS) has put its offices in affected zones on ‘high alert’ and is even advising employees in Mexico City and San Luis Potosi to work from home, Wipro Ltd said it is in the process of providing required travel advisories for specific affected locations.

The WHO has already ratcheted up its pandemic alert level to Phase 4 for the swine flu, signifying that there is a sustained human-to-human transmission of the virus causing outbreaks in at least one country.

Many Indian IT firms have set up delivery centres in Mexico, as a strategic nearshore location to the US. Such facilities allow IT and BPO companies to offer sourcing options to the North American clients. TCS, for instance, has two centres in Mexico with over 1,400 professionals, while Genpact has 2,000 employees spread across two centres. Infosys Technologies’ Monterrey centre in Nuevo León has 221 employees on its rolls.

“We are aware of the developing situation of swine flu cases across countries such as Mexico, the US, Europe, Canada. Our employees at the locations of high alert are safe. We are in the process of providing required travel advisories, education on swine flu, precautions to be taken and information on emergency assistance,” Mr Laxman Badiga, CIO, Wipro Ltd, said.

A TCS spokesperson said that the company has put its offices in affected zones on high alert and that several precautionary steps have been adopted internally, in the organisation. These include continuous communication to employees on avoiding crowded places and asking staff in high risk areas such as Mexico City and San Luis Potosi, to work from home. “According to Government of Mexico risk advisory, there is no restriction travelling to and from Mexico. However, travel is being advised only if considered absolutely necessary and unavoidable,” a TCS spokesperson said.

Although Infosys has not yet issued a travel warning, it has been monitoring the situation closely. “All our employees in Mexico are well….We are closely monitoring the situation and in the event of a breakout we will work with customers and our employees at onsite locations to take the necessary action,” it said.

BPO major Genpact also has taken “proactive measures to protect local employees” against H1N1 swine influenza. “The state of Chihuahua, where Genpact’s Mexico operations are based, has not detected any case of infection, or death from the H1N1 Swine Influenza,” Genpact said, adding that it was taking preventive measures to ensure the safety of workers in Mexico and other facilities in countries that are likely to be hit by the virus.

TCS says Mexico operations not hit by swine flu

India’s largest IT company Tata Consultancy Services (TCS) said that the outbreak of swine flu has had no bearing on its business in Mexico. TCS, apart from having a large operation in Mexico, runs a global delivery centre in Mexico’s second-largest city Guadalajara.

According to TCS managing director & CEO S Ramadorai the situation in Mexico is being closely monitored. “No project is on hold at this stage. Every employee of ours has been carefully checked,” he said. TCS, which set up operations in Mexico in 2003, has a staff strength of 1,400. The company provides IT services and solutions to large Mexican companies across a host of sectors.

Stan Chartered may double India call-centre staff

Standard Chartered Bank, which runs India's largest foreign bank, said it on Monday it could double the number of call-centre employee numbers at its Indian back-office unit by the end of March 2010.

The bank said in a statement the wholly owned unit, Scope International, had 1,100 call-centre staff in the southern cities of Bangalore and Chennai. Standard Chartered said Scope has about 7,300 staff in total, about 9 percent of the banking group's workforce.

Websense targets 30% growth in India and AsiaPacific region

Websense Inc, a US-based internet security solutions provider, projects over 30 per cent growth for its services in India and the Asia Pacific region. India contributes about 25 per cent of the company’s Apac business, which spreads across 40 countries.

“We are strong in growth in markets like India. We had a terrific Q1 with about 34 per cent growth. We will continue to invest in this mature market,” said Timothy K Lee, VP, Asia Pacific and West Asia, Websense Inc.

The company would invest in increasing its sales force and also in supporting and educating its channel partners. Lee, however, didn’t reveal the company’s actual investment in the region. Websense markets all of its solutions through channel partners. It has about 80 resellers in India. It employs about 300 people in the region for sales and marketing and about 200 engineers in its China R&D centre. Websense will increase its sales force by 15 per cent this year.

3i Infotech buys J.P. Morgan’s NRL biz

IT solutions provider 3i Infotech announced it has entered into an agreement to acquire J.P. Morgan Treasury Services’ national retail lockbox business. 3i Infotech’s subsidiary, Regulus Group, is currently the largest outsourced remittance processing provider in the U.S, and this acquisition will further strengthen the unit.

All J.P. Morgan Treasury Services NRLB employees have been offered positions with Regulus. Between its newly acquired and existing facilities, Regulus will process more than 700 million payments annually once the acquisition is complete, the firm stated in a release. "We’re excited about partnering with J.P. Morgan Treasury Services on a deal that enables both firms to align their respective core business processes," CEO and president of 3i Infotech North America Kathy Hamburger said.
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Wipro BPO hiring 1,200 for Hyderabad centre in 6 months

Wipro BPO would be adding 1200 employees to its Hyderabad unit over the next 6 to 8 months. The employees would be graduates or under graduates from science and commerce background, the company said during a media conference.

The company is planning to hire about 8000 employees across its various campuses next year. Presently, the BPO unit has 22,600 employees on its roles, of which, 3,150 are located in its Hyderabad campus.

"We have seen some impact of the poor economic conditions in the US. But this should help us get more outsourced work," Ashutosh Vaidya, head of Wipro BPO said.

The company gets most of its business from the US market. Europe comes next in line. The contribution from other geographies to its earnings is marginal.

Wipro BPO had posted revenues of $290 million in the last fiscal year and contributes about 7 per cent to the parent company’s revenues.

Wipro BPO handles 123 processes for its customers in domains such as banking & capital markets, insurance, travel & hospitality, hi-tech manufacturing, telecom and healthcare sectors.

Vaidya felt that the anti-outsourcing sentiment prevalent in the US is a cause of concern. "Ultimately, it’s a business decision that our clients have to make," he said.

Birlasoft set to reduce staff salaries by 5%

Staff in the know although formal announcement yet to be made
Weighed down by the global recession, IT services company Birlasoft, part of the CK Birla Group, is looking at 5 per cent salary cut for their employees across the board. The top management of the IT company, in a meeting on Tuesday, has decided to go ahead with the decision on the salary cut.

The management is yet to make a formal announcement about the decision. However, the employees of the company have been apprised verbally.
A senior executive in the company told Financial Chronicle that the management is working on two strategies to reduce the expenditure cost.

“The company is looking at 5 per cent salary cut across all centers. The board is also looking at a cut on the variable. No formal e-mail has come to us, but the management has apprised us that a cut is likely,” the executive said.

Ravi Kathuria, senior vice-president, global marketing, Birlasoft, said that the downturn has pressure on margins of the company. “It is not unusual at this point of time, since companies are reeling under cost pressure. We are witnessing the pressure on our margins. We have not announced any pay cut as of now, but we are not ruling this option out,” Kathuria said.

He said that the number of benched staff in the company had reduced and they are seeking improved productivity.

Headquartered in Noida, Birlasoft employs more than 4,000 people across the US, UK, Germany, the Netherlands, Czech Republic, Malaysia, Australia, Singapore and India. The company offers services both on-shore and off-shore services.

Affected by the credit crunch in US, the company has cut down the employee strength from 4,500 people to 4,100. The company has also stalled its hiring plans. Birlasoft is part of the global $1.4 billion CK Birla Group. Their services include application development, support and maintenance, enterprise application implementation, inte-gration, infrastructure management and quality assurance and testing.

Adobe launches offensive against software piracy

In collaboration with local law enforcement and government authorities across the country, Adobe Systems Incorporated has launched one of its largest initiatives to battle software piracy.

The initiative includes 25 civil enforcement actions recently conducted across six major cities and other key locations in India. Organisations suspected of unlawfully using Adobe software are potentially liable for both civil and criminal penalties, including payment of damages.

The enforcement actions recently undertaken on behalf of Adobe encompassed a cross-section of users within commercial institutions, the IT and BPO industry, and other organisations dealing with creative content.

Each year, software companies worldwide lose over $47 billion in revenue to piracy, according to research conducted by the Business Software Alliance.

Commenting on the drive, Sandeep Mehrotra, sales director, Adobe India, said, "Our first priority is to inform and excite our customers about the power of Adobe creative and business solutions. At the same time, we educate our users on Adobe licensing programmes and the concept of software asset management to ensure they are working within the purview of law. Where we find flagrant violations of our intellectual property, we will take legal action against both the distribution channel and purchaser to protect our rights."

With corporate governance in the limelight, more and more organisations are embracing software asset management to ensure peace of mind and business integrity.

Adobe is actively engaged with various industry bodies working on educating companies on the importance and value of software asset management.

Tuesday, April 28, 2009

IT sector may layoff over 1 lakh by Sept

The Indian IT services sector may see up to five per cent layoffs -- amounting to more than one lakh job cuts -- over the next six months as companies focus more on cost-cutting due to persisting weakness in global demand, experts say.

Companies may reduce workforce in this fiscal, mostly based on stringent performance criteria, experts added. "We expect the knowledge industry (IT) to see 3-5 per cent non-voluntary exits in the first two quarters of the financial year mainly in senior and middle levels," Deloitte Touche Tohmatsu Senior Director (Management Consultancy Services) P Thiruvengadam said.

Given the fact that more than 22 lakh people work in the IT industry, five per cent non-voluntary exits would mean more than one lakh employees being shown the door by September.

Nasscom estimates more than 22 lakh people were working in the Indian IT-BPO sector in FY2009 (till February), while indirect job creation is estimated at about eight million.

International Management Institute (IMI) Director C S Venkata Ratnam said, "The IT sector is better off but it may see up to 4-5 per cent job losses in the first two quarters of this fiscal."

Wipro Laidoff 300 more 'Non-Performers'

To power its growth during the present slowdown, Wipro, the third largest IT services company in India, has resorted to certain stringent measures. Last week, according to company sources, an indefinite number of employees have been laid off by the company. An employee, who has been laid off says, "Last week, around 300 employees were laid off on one single day."

Some had to wait for a long time to get back their documents, after being told about the company's decision. The employee illustrates, "I had to wait for more than eight hours to get back my documents, because of the long queue of employees."

Few days back, Wipro had outperformed its larger rivals Infosys and TCS both in terms of profit and revenue growth, in its Q4 results.

The move by the Bangalore-based company comes in the wake of an announcement made by Girish Paranjpe, Joint CEO of Wipro's IT business. Paranjpe had said, "For FY09, we probably have seen five to seven percent of our manpower employed with the IT business being released, as against two to three percent a year back."

According to Paranjpe, the performance criteria have become tougher now, because of the slowing economy. Last year, the company had announced, to put four to five percent of its workforce that is about 3,000 employees, under the performance scanner. Based on their performance some would be given counseling to help them improvise, while others would be asked to quit.

The spokesperson said, "Those who don't clear the �tests�, are the ones who are sent off." Pointing out to similar kinds of measures by other companies, she added, "This type of a move is taken by many companies these days, due to the economic downturn."
Courtesy: siliconindia

Tech Mahindra posts profit, upbeat on Satyam

Tech Mahindra Ltd, which is now a top-tier Indian outsourcing firm with its deal to take over Satyam Computer Services, on Monday posted a March quarter profit from a loss a year earlier.

The company, a unit of India's tractor and utility vehicle maker Mahindra & Mahindra, said a focus on efficiency and costs offset a weaker currency and global economic slowdown.

"The environment remains challenging," Sonjoy Anand, chief financial officer of Tech Mahindra told Reuters in a phone interview. "I would have to say that the environment on the pricing front is on the negative side."

Tech Mahindra received more than 60 percent of its revenue from Europe in January-March, and said a fall in the British pound against the Indian rupee over the year had dented earnings.

Syntel Q1 earnings tops Street, ups '09 profit view

Information technology services and knowledge process outsourcing firm Syntel Inc posted a better-than-expected quarterly profit and raised its 2009 earnings forecast, sending its shares up as much as 27 percent.

The company, which had cut about 5 percent of its jobs during the first quarter, said the fall in the value of Indian rupee and cost management helped its operating margins during the first quarter.

U.S.-based Syntel, which competes with companies like Cognizant Technology and Infosys, provides low-cost business process outsourcing services from India where most of its employees are located.

Tech Mahindra may use benched Satyam staff

Tech Mahindra is hammering out a solution that would offer relief to the bloated workforce of the beleagured Satyam Computer Services. The workforce with a large number of unultilized but technically qualified employees has been one of the biggest concerns since the Satyam sale.

The proposed arrangement, to be modeled along the lines of ‘secondment,’ will enable Tech Mahindra to use Satyam’s workforce for its projects instead of hiring people from outside. Secondment refers to transfer of a person from their organization of work to a temporary assignment elsewhere.

“We will definitely like to optimise some of our costs and strengths but it will be done with prior approval of both the boards because they are separate listed companies,” said Tech Mahindra’s president (international operations), CP Gurnani, in a response to an ET query.

The top management of Tech Mahindra and Satyam are exploring the feasibility of an arrangement akin to ‘secondment,’ said people familiar with the development.

Tech Mahindra may have a project that needs manpower with specific skill-sets. If these skill-sets are available with Satyam, their workforce can be assigned for the project. It can work both ways as the idea is to synergise skills, said a person with knowledge of the matter.

Tech Mahindra is focussed only on providing services to telecom clients but it could leverage the technical skills of Satyam employees for its projects and also expand the range of services it currently offers to telecom clients.

“The secondment is a good move, it will, on one hand improve the resource utilisation at Satyam and on the other hand, address the resource gap at Tech Mahindra. However, more importantly, the broader significance of this move is that the Tech Mahindra’s management team has got cracking post Satyam’s acquisition and we should not be surprised to see more action forthcoming in the near term,” said Alok Shende, principal analyst, Acsendia Consulting.

The nuts and bolts of such an arrangement may have to be worked out carefully, especially since Satyam will function as a standalone entity. The relationship between the two firms would have to be on an arm’s length principle, said an IT analyst who did not wished to named.

Satyam has a work force of around 48,000. Of this, nearly 80% work off-shore and the remaining are on-site workers. The bench strength is estimated at over 12%. But investigating agencies probing the scam at Satyam reckon the bench strength of offshore employees was much higher at 40% in September 2008.

The bench consists of employees who are not working on any billable projects. In effect, the bench adds to the cost but doesn’t contribute to revenues. Managing costs and bringing in new projects are critical to revive Satyam, which had to take a working capital loan to run its operations.

GM to cut 21,000 jobs, scrap Pontiac brand

Source: DetroitFreePress
General Motors Corp. will cut an additional 7,000 to 8,000 factory jobs in the United States, kill the Pontiac brand and shed 2,600 dealers by 2010 under a revised business plan developed with the Obama administration and announced today.

The new job cuts bring the total number of hourly jobs eliminated under GM’s plan to 21,000. GM said additional cuts among salaried workers would be expected, but did not give a specific target.

Magna International announces more layoffs

Magna International is laying off about 725 employees temporarily at its biggest plant in the country.

The company announced this morning that Formet Industries, a manufacturing division of Magna International Inc.'s Cosma unit, will cut production and jobs dramatically at its St. Thomas plant next month because of the slide in demand for North American trucks. The reduction represents more than half of the plant's workforce.

Laid-off computer technician admits cyber-threats against former Middlesex County employer

A computer technician from Middlesex County pleaded guilty today to extorting the investment firm that laid him off, allegedly threatening to hire Eastern European computer hackers unless officials beefed up his severance package.

Viktor Savtyrev, 29, received a pink slip in November and vowed to enlist cyber-criminals from Belarus to cripple the $15 billion firm's computer network if officials failed to meet his demands for more money, better medical coverage and "excellent references," according to a complaint filed by the U.S. Attorney's Office for New Jersey.

Lockheed Martin announces layoffs

Lockheed Martin Systems Integration in Owego announced a round of layoffs that will affect 225 workers.

In a memo to employees, LMSI president Marilyn Hewson said that a tough economy and budget changes at the Department of Defense forced the company to make workforce changes. The layoffs will occur across all divisions and staff will be notified in mid-May. Lockheed says they made every effort to minimize the layoffs.

Hanesbrands announces 500 job cuts

Hanesbrands Inc. said today it will lay off 500 employees in corporate management and distribution operations to reduce costs.

About 250 management employees will be informed this week of the layoffs. About 200 of those employees are based in Winston-Salem, 30 are elsewhere in the United States and 20 are outside the U.S.

Nucleus Soft to cut costs by 10%

Nucleus Software Exports Ltd on Monday said it will be actively looking to cut costs in 2009/10 to help improve margins after the company reported a 40 percent drop in profit for the March-quarter.

However, revenue is expected to be flat in the year to March 2010, Managing Director Vishnu Dusad said after the firm's results.

"We would be reducing costs by 10 per cent by taking various measures, all standard measures: energy costs, travel costs," he said, adding that the firm hopes to save Rs 260 million from these measures during the current fiscal.

The company hopes to take more work offshore and will push to reduce on-site content to 'whatever extent possible', he said. It plans to move a third of its 300 on-site employees back to India this year, he added.

Reliance Money to sack about 300 employees

Anil Ambani Group firm Reliance Money on Monday said it is undertaking a performance monitoring exercise for its staff which could result in separation of about 300 employees due to their under-performance.

The company, however, brushed aside speculations about any massive layoffs terming the churn of about 10-15 per cent as a normal process in its businesses and also dismissed rumours about the resignation of its MD Sudip Bandyopadhyay.

Besides, the company said that it has even hired more than 500 persons in certain businesses in the recent months.

"The churn of under performers has to be carried out to keep the company trim and fit and the reduction of less performing staff by 10-15 per cent is the usual cut which we make in March-April period," Bandyopadhyay told reporters over telephone from Mumbai.

The total workforce of Reliance Money across all its verticals, including broking, money changing & money transfer and gold coins, is over 2,000 employees. On the basis of the total workforce size, there would be around 200-300 jobs cuts at present.

Monday, April 27, 2009

Yahoo! to hire nearly 150 people in India

Yahoo! is hiring for hundreds of job openings including nearly 150 vacancies in India, even as the internet major is set to bring down its global workforce by about 675 employees.

"We are currently hiring for key positions and will continue to invest in strategically important areas," a Yahoo! spokesperson based in the US told media in an e-mail.

While the spokesperson did not elaborate on country-specific hiring plans, the career section of the internet major's website shows that Yahoo! is looking for about 150 positions in India alone.

The openings are for its operations in Bangalore, Mumbai and New Delhi, while most of them are for Bangalore. Further, the internet major has over 120 job vacancies for different offices in the US, the website shows.

The India openings are for various departments including engineering, customer care, research and product management, among others. Last week, while announcing its first quarter results on April 21, Yahoo! said that it would slash five per cent of its headcount worldwide.

At present, the company has 13,500 employees globally and a five per cent reduction would amount to laying off 675 people. The firm is resorting to job cuts in the wake of slackening advertisement revenues and a 78 per cent drop in first quarter profit at USD 118 million.

However, it is not clear whether India operations would be affected by the job cuts. India has about 1,500 employees. "We will be reducing the number of our current employees worldwide by approximately five per cent. We do not break out how individual countries and teams will be impacted.

"We currently have 13,500 employees worldwide. We do not break down how many employees are in each country," the Yahoo! spokesperson said.

The spokesperson noted that the majority of impacted employees are expected to be notified within the next two weeks. In 2008, Yahoo!'s worldwide workforce was about 15,000 and out of them, about 1,500 employees were in India.

Yahoo! last October had announced that it would reduce its headcount by as much as 10 per cent. "The goal is to reduce its current annualised cost run rate of approximately 3.9 billion dollars by more than 400 million dollars before the end of 2008," the Internet major had said in October.

"The majority of expenses are headcount-related, Yahoo! expects to reduce its global workforce by at least 10 per cent during the fourth quarter of 2008," it had noted.
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IT companies to hire more foreigners abroad

India’s top technology firms, including TCS, Infosys and Wipro, are preparing to increase the proportion of foreign employees in their workforce as they seek to address protectionist lobbies and position themselves as ‘job creators’ in the markets they serve.

The move comes in the wake of growing anti-offshoring sentiments in the US, the world’s biggest market for software services. While TCS aims to double its foreign workforce from the current 10,000 over the next five years, Infosys and Wipro could see non-Indians account for 10-15% of their total employee base in three to five years’ time, from around 5% now.

"It’s a strategy to reverse the trend, as we realise that it’s necessary to shed the old way of getting only Indians to do the jobs," said Pratik Kumar, corporate vice-president and HR head of Wipro. "How can you justify the fact that despite significant overseas revenues, we still have over 95% Indians on the payroll?" he added.

Wipro aims to establish another centre in a tier-two US town after its Atlanta development centre becomes fully operational in a few months from now. Over the next two years, Wipro will have around 750 US citizens working at its Atlanta centre. "We aim to undertake significant local hiring, starting this year itself," he said.

Among the top Indian technology firms, TCS employs the most number of non-Indians, accounting for almost 9% of TCS’ total workforce. Non-Indians account for around 5% of total workforce at Wipro and Infosys.

However, Mohandas Pai, HR head of India’s second biggest software firm Infosys says, despite all the hype around hiring more local workers, finding skilled professionals with adequate programming skills remains a challenge in the US and UK. "We want to double our foreign workforce, but don’t find people with adequate skills in those markets," he said.

Indian IT industry faces slowdown

Amidst a worsening macroeconomic scenario uncertainty continues for Indian IT services. Even a falling rupee has failed to prop up rupee revenues as volumes shrink. With Wipro and HCL Technologies declaring their results on Wednesday, the numbers for all Tech biggies are out.

Azim Premji, chairman of Wipro, said, “Environment looks tough ahead.” While TCS and Infosys saw sales dip over one per cent each, Wipro and HCL Technologies saw negligible organic growth. Profits too were pressured with HCL Tech taking a big Rs 200 crore knock on forex losses.

Margins also contracted for most. Moreover, the billing rates are also coming down and despite companies freezing wages, cutting back on expenses and trimming operations, margins remain under pressure.

Vineet Nayyar, CEO of HCL Technologies Ltd, said, “Q3 volume growth is flat and EBIT margins are down just 47 bps.”

Well, the outlook for IT services players is grim with Infosys and Wipro projecting a 4-5 per cent decline in revenues in the next quarter.

Owing to the economic downturn, apex industry body Nasscom has delayed its IT export revenue target of $50 billion to 2011 from 2010 earlier.
Industry experts believe the BFSI demand may recover by second half of 2009. Meanwhile companies are focusing on cost-cutting and higher offshoring to sail through these tough times.

How 2009 Compares to the Dot-Com Bust and Prior Times

Until this week, the major analyst houses have said the current recession is not as bad as what the tech sector suffered though in 2001 and 2002 after the dotcom bubble popped. Forrester, IDC, and Gartner still all agree that IT spending is down, but whether this recession is worse than the dotcom fallout is now a matter of debate.

The fact that analysts were maintaining that IT is not in as much trouble today as it was during the last recession has served as something of a beacon of hope for tech workers.

But that changed earlier in the week when Gartner issued a report saying that 2009 will be worse than 2001. The analyst house projected global IT spending would decline by nearly 4 percent this year over last, citing a "general slowdown in demand for products and services across the board," to which IT is not immune.

While Forrester and IDC also see spending in a downward spiral, the firms do not exactly concur with Gartner.

Forrester this week circulated its "U.S. IT Market Outlook for Q1 2009," a rather bleak document that begins with the words, "The U.S. market keeps getting worse than we and many economists had expected."

But Andrew Bartels, Forrester principal analyst and vice president, insists the tech sector is not in as bad a shape as it was after the dotcom bust. Bartels was careful to not comment specifically on Gartner's findings, but explained that in 2001 Forrester saw a 6 percent decline in spending, followed by 11 percent in 2002, whereas when Forrester published numbers for 2009 this week, it projected a 3.1 percent decrease in IT goods and services purchased by business and government, rather than its original estimation of a 1.6 percent increase.

[ Related: Forrester's Bartels first predicted we wouldn't see a repeat of the 2001-2002 bust in InfoWorld's Is tech in more trouble than we think? ]

"IT is down, just not to the same degree. We see 2009 as worse than we thought it would be in December, but we don't see it getting worse than we're predicting now," Bartels said. "The difference is that the decline today is for two or three quarters, not the two to three years we saw in 2001 and 2002."

IDC, for its part, has re-forecast its spending projections down twice since July 2008, according to IDC Research Director Robert Mahowald, who also would not comment directly on Gartner's numbers or methodology.

Mahowald pointed out, however, that IDC re-examined 93 markets and found all those were headed downward in 2009 except three: managed telepresence, consumer broadband, and SaaS.

Which brings us to two things all the analyst firms agree on: First, as CFOs and CIOs look for ways to shift IT dollars from capital expenditures to operational efficiencies, enterprises will tap SaaS and cloud-based resources more. Even Gartner projects that cloud computing spending will soar in 2009.

Second, the current economic downturn -- regardless of whether it proves to be worse than the dotcom wake -- will not last forever. Gartner referred to the current economic turbulence as a "bleak outlook near-term."

Forrester's Bartels said demand for IT products and services is not cancelled, merely delayed, which actually creates pent-up demand. As such, he is already hoping that indications of recovery will emerge this year.

"In Q4 2009 we might see some early signs of recovery," Bartels said. "Certainly by 2010 we'll start to see some better numbers."

U.S. talent firm to develop global workforce in India

U.S.-based talent management firm Global Crosswalk Inc (GCI), co-founded by two Indian expatriates, has set shop in India's IT hub to help companies develop global workforce for providing value-added/knowledge-based services.

"We offer niche solutions in cross-cultural strategies, culture competence and expatriate services to Indian and overseas firms operating in a globalised world," GCI co-founder and chief executive Radha Nath told reporters here Friday.

"We cater to corporations conducting business in a global market place, providing services across national boundaries and employing workforce across regions," he added.

GCI co-founder and advisor Naren Balasubramanian said the company was in talks with five-six Indian firms across verticals, including the knowledge sector for client engagements.

"We hope to engage a couple of clients by the second quarter of this fiscal. Even in a downturn, we see opportunities to help organisations develop global workforce, as global way of doing business has become irreversible," Balasubramanian said.

The company plans to provide its service delivery capability in Pune and Chennai over the next 18-24 months.

"We offer a level of sophistication to bride the cultural gap in the workforce, as the global market place transforms to value-added/knowledge based services from commoditised services," Balasubramanian pointed out.

GCI's services are built on synthesis of knowledge spanning anthropology, behaviourial sciences, organisational development and instructional design.

In the US, GCI has client engagements with Detroit regional economic partnership, Asia-Pacific chamber of commerce and Automobile Alley.

Jet Airways cuts salaries of 370 employees

India's leading private carrier Jet Airways Friday said it has cut salaries of at least 370 senior employees as the airline was bleeding on account of falling traffic and rising operational costs.

"We have temporarily imposed a reduction in salaries for the management cadre. This will affect about 370 employees," the spokesperson for the airlines told IANS.

The salary cut, of up to 25 percent, is part of a cost-restructuring exercise by the airline, which is undergoing losses in the wake of the economic slowdown worldwide.

Concerned over job loss and salary cuts, as many as 25 Indian pilots including over a dozen from Jet are believed to be heading for the Gulf to join leading Gulf carrier Qatar Airways.

However, the Jet Airways spokesperson said the company had no information of its pilots quitting.

Last October, Jet Airways had announced the retrenchment of about 1,900 employees after a strategic alliance with Kingfisher. It, however, took back the employees following widespread protests.

TCS raises standards for staff performance

Tata Consultancy Services (TCS) has raised the performance bar for its 143,000-odd employees. Those under the scanner will now be given only three months to improve their skills. The company, India’s largest for information technology services, will no longer give an extension.

“We have reduced the time period for improving the skills. Earlier, if an employee would show even a small improvement, we would give extension of a few more months. Henceforth, that will not be done,” said Ajoy Mukherjee, vice-president and head, Global Human Resources.

The company will consider an employee’s performance for the past three years so as to maintain consistency.

Mukherjee dismissed allegations that the company had put over 1,000 employees under the scanner in India. “Globally, we had around 1,100 employees under our performance improvement programme. Of this, the India number was 700-725, which is not even 1 per cent of the TCS headcount. The reason for this number to be more than the usual 500 is because our employee base has also increased,” said Mukherjee.

The company added close to 22,000 trainees in fiscal year 2009. Despite this, it managed to reduce its employee cost by Rs 121 crore. Mukherjee believes some measures the company has put in place in the first quarter of FY09 have begun yielding results. These include changing the mix of trainees to lateral (experienced hands). From the third quarter, it hired laterals in a controlled manner. By the end of the year, TCS’ mix of trainees to lateral was 72:28. Further, the offshoring focus reduced employee cost. Over 1,000 employees of the company onsite have returned, as a result of which the allowance cost has come down.

While Mukherjee did not give any details on variable pay for fiscal year 2010, he said the status quo would be maintained.

Indian IT firms try to reduce or push out benched staff

Keeping a reserve pool of staff is making less sense to information technology (IT) firms. A large bench (people without assigned work) is generally considered to be an asset, a tool to control attrition. But with the global slowdown hitting the sector, it is proving to be a liability.

This is forcing companies to devise ways to reduce bench strength, by posting in other areas and paying them less till they become productive assets.

India’s second-largest software company Infosys Technologies, for instance, has given its bench employees a choice, wherein they can work with the company’s Business Process Outsourcing (BPO) arm with the same salary and perks. It is also encouraging benched employees to apply for projects using the Intranet portal — — the failure of which may also lead to job loss. In some companies, techies on the bench are being encouraged to find projects on their own, internally, by hardselling themselves.

Excluding trainees, Infosys officially agrees their bench strength is 3,500-4,000 people. This will increase once the 8,000 people undergoing training join in the next two months. Besides, the company has issued joining letters to around 16,000 campus recruits, who were given offers last year. To mitigate such pressures, Infosys has already announced an increase in the current training duration from the three months to almost six months.

Wipro has already given an option to its bench resources to work for only two days a week and take a 50 per cent cut in their salary. Close to 1,000 employees, including senior managers and project managers, have availed of this offer so far, according to the company. In some cases, the company is encouraging the bench resources, including managers, to come to office 10 days a month at a stretch and take a cut in salary.

The company is also encouraging some employees to take a sabbatical for six months or more to go for higher studies. About 10-12 per cent of Wipro’s employees with the IT services business are said to be on the bench now. “We want to keep our efficiency level fairly high. We don’t want to create laxity there. It is not just the question of a bad economic situation, but working habits, too, get spoiled by doing so. It is better to keep a tight bench and keep everybody fairly engaged,” says Girish Paranjpe, Joint CEO of Wipro’s IT business.

HCL Technologies has urged its benched employees to take a pay cut of 25 per cent. It is also asking them to find opportunities inside the company on their own, failing which they may lose their jobs.

TCS, India’s largest IT firm, which added 32,000 employees last financial year, including close to 25,000 freshers, says it is very important to ensure utilisation is at least at 74 per cent, though the company claims the increasing bench is not much of a problem. It, however, says the plan is to increase the training period of new recruits.

“The idea is to train people better, utilise people better and also help them gain experience. The normal training period is the same, but in addition to that we will give more training, if there is an additional period for which we have to keep them on the bench. We will definitely use them either in development of some of the assets (IT solutions, platforms) or we will give them some training. It can be an additional two or three months. It will differ on a case by case basis,” said N Chandrasekaran, COO and executive director of India’s largest IT firm.

Moreover, while the physical bench had always been there, mid-sized IT firms like Hexaware and Mastek have coined the word ‘virtual desk’ to define a certain section of their unutilised resources who will be enjoying lesser privileges and perks. Hexaware had said the virtual bench has about 350 employees who will get about half their basic salary.

The ratio of unutilised resources is estimated to have increased by over 4-6 per cent during the past four to five months. Sabyasachi Satpathy, co-founder and director of Mindplex Consulting, concludes: “As the new deal pipeline starts drying up and existing clients tightening scope/volume, outsourcing vendors are facing an increasing pressure in managing resource utilisation levels. It will be crucial to have a balanced bench ratio to meet shareholder expectation (margin impact), as also staff adequately for future projects.”
Courtesy: BusinessStandard

TCS to focus on offshoring, to move staff back to India

As part of cost-cutting measures, India's largest outsourcing firm Tata Consultancy Services (TCS) on Sunday said that it will relocate staff abroad into India.

"The company follows an onsite-offshore model. We will focus to do more work in India because it helps in saving cost and efficiency," TCS Chief Operating Officer N Chandrasekaran told media.

However, the company would continue to do work onshore and relocation did not mean that it was winding up its operations abroad. The company, which tried out its relocation in January-March this year, gained significantly in the last quarter of 2008-09.

In Q4, the company brought back its US staff to India resulting in a cost saving of Rs 121 crore. The company did not give any figures on how many staff were brought back. The relocation of staff could be in thousands, he said.

At the same time, the company would be hiring more people numbering 24,855 in India. It would hire 250 freshers in the US and a few in China, Chandrasekaran said.

But there would be no lateral hiring and there is a freeze on increments to its staff. He made it clear that TCS would not lay-off people as a result of relocation. "There would be no lay-offs," he said.

Bringing back the staff to India would not be restricted only to the US market, but across geographies. "We have thousands of staff working in the US, UK, Europe and other geographies," he said.

The company had decided not to hire Satyam staff after the scam broke out, but now it is open to it. "When we hire laterals, whoever applies, we will look at them," Chandrasekaran said.

Twice every year, the company sacks non-performers. This year, too, non-performers would go, he said. "Non-performers will go and there is no plan to move non-performing staff to other subsidiaries," he said.
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US visa move raises protectionism fears

For all those seeking to find a job in the land of opportunity, protectionism may be eating into their dream and aspirations. In what could turn into a bitter ruling for overseas job seekers, two US senators have introduced a bill seeking to reform H1B visa procedures that would make it harder for companies to hire non-Americans.

Most importantly, the bill puts an onus on employers to prove that they had tried to recruit an American citizen before hiring an H-1B, which wasn't the case before. It also prevents companies who have a majority of H-1B employees on their payroll to hire any more.

The bill says that the employers must first make "good-faith attempt" to recruit a qualified American worker. It prohibits advertisements for only H-1B employees and also says that a company cannot hire more H-1B workers if 50 per cent employees are under the same category.

Moreover, it seeks the labour department to have more authority to investigate abuse.
However, Nasscom says it is surprised because it was in touch with people in the US Congress and administration.

“What really impacts us is the one that prohibits Indian companies from getting H1 and L1 visas. From our perspective this is targeting Indian companies. It’s protectionist in nature and it would prevent Indian companies to compete in the US markets,” Som Mittal, President of Nasscom said.

The Indian companies earned nearly $47 billion from the export of software and services around the globe during fiscal year 2009. The industry leaders say while they agree with stricter measures, the move should not be protectionist.

Suresh Senapaty CFO of Wipro, said, “There are two aspects—one is to remove the anomalies of the existing law to stop misuse and we completely support that. But if it is to promote protectionism policies, then it is against what all the leaders agreed in G20 including president Obama.”

Well, American President Obama has promised to talk comprehensively on immigration reform in May.

The US issued 85,000 visas under the H-1B category during the last financial year, of which Indian companies got 12,500. Now, getting one of these going ahead would become tougher, especially if such bills get passed.
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Don't see new H1B proposal turning into an Act: NASSCOM

US lawmakers have introduced a new bill with additional restrictions on H1 B visas. Ganesh Natarajan, Chairman of the National Association of Software and Services Companies (NASSCOM), said if this proposal passes in the current format then it will have a fairly disastrous impact on the IT sector.

“But I am hopeful that over the next three-months we will not see this really becoming an Act.” Meanwhile, Commerce Minister Kamal Nath said he is concerned by the contents of H1B visa bill by Senator Durbin and Senator Grassley. "The bill will restrict the ability of Indian IT companies to compete in the US market place. The bill is not in line with US President Barack Obama's stand against protectionism at the G20 meet and not in line with our desire to mainstream development in the Doha negotiations."

Saturday, April 25, 2009

HSBC uncertain about raising headcount in India this year

Global financial services provider HSBC Group has said it is not contemplating to hire people in India in the current year, having increased its workforce by 5,000 during 2008.

"I am not sure whether we will increase it (headcount) this year," HSBC Holdings Plc Group Chairman Stephen K Green said, when asked whether the global banking major was planning to raise its headcount in the country.

During 2008, the UK-based group had added 5,000 staff which raised the total headcount to 37,000, said Green, who was on an official visit to India last week.

He, however, said "it (India) is largest out of all countries we employ after the UK."

India contributed to around seven per cent to the Group's overall profit during 2008.

On the job-cut, HSBC India Chairperson Naina Lal Kidwai said the bank had not enforced any job cuts in India, but announced redundancy.

Asked about further investment plans in the country, Green said the group has been investing in the country and will continue to invest.

New H1-B bill wants Indian IT cos to hire more in US

The US has introduced a new H1-B visa legislation, which may, if voted into law, affect Indian IT companies adversely. According to the new bill, only those companies that employ a majority of American workers will be eligible for H1-B visas.

The legislation, if passed, would mean Indian IT companies in the US will need to hire locally for their work. The IT companies will also need to re-jig their onsite-offshore employee ratio, something that they say is a difficult job and may take about three to four quarters to do CNBC-TV18 was the first to report the development on February 9 where it said a team of NASSCOM officials was on its way to the US to talk with Senators Durbin and Grassley — the brains behind the legislation — to ensure that such a piece of legislation did not get pushed through.

Apple Cuts Back On Retail Staffing As Sales Slow

Apple (AAPL) is cutting costs as its retail division underperforms the rest of its business: In a SEC filing (via CNET), the company reported that it now employs 14,000 "full-time-equivalent" worth of retail workers, down 1,600 from the end of 2008.

That's a roughly 10% staffing cut, but as Peter Kafka notes at MediaMemo, it's not necessarily a staff reduction. "Full-time equivalent" means just that -- the equivalent of one person working a full-time job. It could also be two people working half-time jobs; which means that Apple could have just cut back on workers' hours without cutting back on personnel. Apple wouldn't comment to MediaMemo, referring Kafka to its SEC filing.

Dot-com collapse prepared Bay Area(Silicon Valley) companies to react to downturn

The dot-com collapse left Bay Area companies better prepared for recession than their global counterparts, according to a survey of senior executives released Thursday by the Bay Area Council.

Seasoned by the 2001 dot-com downturn, three-quarters of the companies had a clear recession plan, while only 66 percent did globally, the council said. Four-fifths have cut discretionary spending, compared with 71 percent globally.

Unfortunately for Bay Area workers, the plans involved layoffs and cost cutting. Every one of the more than 50 companies surveyed by the council said it was laying off 5 percent to 15 percent of its work force.

The layoffs are occurring across all levels of the corporate hierarchy, and many of these "first-round" layoffs have already been executed, the council reported.

Companies are also imposing hiring freezes and using temporary workers or contractors rather than full-time workers while eliminating overtime and reducing employees' hours.

At the same time, attrition is making room for some hires, and companies say they are seeing more and higher-quality resumes. The downturn represents an opportunity for more staid industries to hire top talent, the report said.

Research and development investment has escaped cuts, for the most part, the council said.

The council's Economic Institute conducted the survey with consultant Booz & Co. between January and April. The council, a business-sponsoredpublic policy advocacy group, said it wanted to find out how Bay Area companies were managing the recession, which hit relatively lightly at first but in recent months has cut deeply into regional business activity.

It did not name the companies it surveyed but said they ranged across industries and included both large and small enterprises.

"By now, most executives have moved beyond cost-cutting to thinking about how to strategically capture opportunities offered by the recession," the report said.

Companies also reported reductions in spending on technology, though spending on software as a service showed some growth. The recession will probably speed a shift toward "cloud computing" and subscription software services, the report said.

More than half — 58 percent — of the executives reported pursuing mergers and acquisitions, as opposed to just 38 percent globally, and more than half were also hiring outside talent, despite the ongoing layoffs.
More than half also thought the recession would improve their long-term position.

The global numbers used for comparison were from another, similar study done by Booz.

Friday, April 24, 2009

HCL Tech follows just in time hiring policy

In order to cut the cost of training, HCL Technologies announced that it will hire people just in time of requirement rather than maintaining a bench, reports Economic Times. The company declined to give a hiring outlook for the year ahead.

The overall global headcount of the company fell by 992, to 54,026, from December to March. However, the company clarified that it has not laid off any employee.

iSOFT wins projects in Latin America

iSOFT, an IBA Health Group company with product development centres in India, has bagged two projects worth $349,651, to provide Hospital Information Management System in Mexico and Honduras. This is the firm’s first contract in Honduras and fourth in Mexico.

iSOFT will develop and implement a system that will provide a central register of information for government departments to manage health services and improve preventative measures.

iSOFT is working with a consortium of three local companies — Techassist, Lain Entralgo and ASI Consulting — to complete the project within nine months. The contract includes support and maintenance for an additional 12 months. The deal is part of a development project by the United Nations, which is providing additional funding.

Real San Jose Hospital at Guadalajara, one of Mexico’s largest private healthcare facilities, is also implementing iSOFT’s patient management and clinical applications. This is iSOFT’s first contract in Mexico’s private healthcare sector.

Agile Financial Technologies launches India operations in Mumbai

Agile Financial Technologies (Agile FT), a global technology partner to key players in the Banking, Financial Services and Insurance (BFSI) sector in emerging markets, has launched its operations in India. Its first office in the country is established in the financial capital, Mumbai.

The new operations in India will provide resources for domestic on-shoring services for Indian BFSI institutions. The company will basically focus on BFSI industry in regions that include emerging countries in Europe, Central and South East Asia, Middle East and Africa.

India leads in IT export: World Bank

The World Bank said India leads all countries in exports of information communication technology (ICT) services.

In its latest report 'World Development Indicators 2009', World Bank said India's exports from the ICT sector increased from about $5 billion in 2000 to over $30 billion in 2006. This accounts for about 42 per cent of total service exports, it said.

At a time when there is a global recession and hundreds and thousands of people are being laid off, India's software industry employs about 1.6 million people, the report said.

China, though a distant second, is the next largest ICT services trader, with about $5.5 billion in ICT service exports, the report said.

The report said China and India were among the fastest-growing exporters. Export growth was led by manufactures in China and by services in India, it said.

No Pay Hike for Wipro Employees this Fiscal

Wipro has announced that it will not be giving its employees any wage hikes this fiscal year. The company also said that it would honor its commitments to fresh graduates it hired last year but on a staggered basis. The students will have to wait longer before being absorbed in the company.

Wipro had issued offer letters to over 7000 students from various universities who have graduated this year.

Pratik Kumar, vice president (human resource) at Wipro said, "We will honor our commitments made to the students last year but it will be on a staggered basics since we don't want them to sit in the bench. We will also have no wage hike during this fiscal."

Since we are not sure how many we can absorb this fiscal, some of the freshers could spill over next fiscal, he said.

Wipro will be going for fresh recruitments only during Jan-Feb of 2010. Kumar also said Wipro would go for lateral hiring depending on business generation.

The company has also made it a policy to approach students only during their last semester unlike earlier when it approached them during the 6th semester.

Earn, learn, have fun, Wipro tells employees

Source: livemint
Wipro said it has a staff utilization rate of 78% and the number of benched employees could increase as it plans 6,000 new hires this year

Software services firm Wipro Ltd is asking its employees to take a break.
As it struggles to manage rising human resources costs, India’s third largest software provider is offering sabbaticals and reduced work days to benched employees. Benched employees refer to staff not engaged in any specific project.

The company has recently introduced what it calls a skill augmentation and flex employment programme that has two components, called Project Enrich and Project Rejuvenate.

Project Enrich, targeted at benched employees, allows them to work 10 days a month at 50% of their cost to company (CTC). They will be absorbed back into projects once deployment opportunities come up.

Project Rejuvenate, though primarily aimed at benched staff, will also be open to some senior employees and allow them to take a sabbatical for one to one-and-a-half years. They will be offered 25% of their CTC.

“They are good resources and we don’t want to lose them,” said Pratik Kumar, head of human resources at Wipro. “We don’t want to do anything drastic as well.”

Wipro said it has a staff utilization rate of 78% and the number of benched employees could increase as it plans 6,000 new hires this year.

HCL Tech not to make campus offers?

To save on the cost of training, one of the leading domestic software exporter HCL Technologies said it will hire people 'just in time' of requirement rather than maintaining a bench.

HCL has been following the policy of just in time hiring, which has paid off well for the organisation, HCL Technologies CEO Vineet Nayyar said.

Declining to give a hiring outlook for the year ahead, Nayyar said the firm is unlikely to make campus offers.

"We have hardly made any campus offers... we have moved to the lateral strategy," he added.

The overall global headcount of the company fell by 992, to 54,026, from December to March. However, the company clarified that it has not laid off any employee.

During the quarter the company has made a gross addition of 2,298 employees. In the BPO services segment, however, the headcount has came down to 11,426 from 12,750 in December.

Commenting on the BPO business, he said the company is trying to move away from voice-based services to platform-based services. So, it is unlikely that the company would make new recruitments for voice-based services.

Lloyds to cut 1,000 British jobs

Lloyds Banking Group, the part-nationalised financial services giant, has confirmed plans to cut almost 1,000 UK jobs at its motor finance division as it moves to save costs by combining sales forces.

The bank, formed out of the merger of Lloyds TSB and HBOS last year, will cut 985 full and part-time jobs over the next two years. The merged group is the biggest provider of car finance in the UK, both to individuals and dealers.

U.S. mass layoffs rise to highest on record

Large-scale U.S. layoffs rose again in March, according to Labor Department data on Thursday, as the economy struggles with what many expect will be the country's worst post-World War II recession.

Last month witnessed 2,933 more mass layoffs, defined as affecting 50 or more workers, than February. This brought the total number of people who lost their jobs in this manner to 299,388, the highest on a record that dates back to 1995.

The U.S. job market has been under severe strain as a crisis first evident in housing spread to the rest of the economy, severely curtailing corporate profits and consumer spending.

Ongoing pain was evident across sectors, with the Labor Department also reporting another record for blanket layoffs within manufacturing.

Mass layoffs now total 31,414 since the start of the recession in December 2007, resulting in the loss of more than 3.2 million jobs. The monthly mass layoff numbers are compiled from establishments with at least 50 initial claims for unemployment insurance filed against them during a five-week period.

Separate data out on Thursday showed the number of continuing unemployment claims climbing to a new record of 6.14 million. Weekly initial jobless claims also rose again, to 640,000.

"Over the past year, the deterioration in initial claims, continuing claims, and the insured jobless rate has been just as bad as they were during the 1981-1982 recession, which has been the most severe in the post-World War II period," said Steven Wood, chief economist at Insight Economics. (Editing by Padraic Cassidy)

No possibility of merger: Tech Mahindra to Satyam employees

The meeting between Tech Mahindra and the Satyam board is underway at Hyderabad. It is the first time that Tech Mahindra is meeting the Satyam management after the Company Law Board approved Satyam stake sale to Tech Mahindra.

However, durign the meeting Tech Mahindra indicated Satyam employees that there is no possibility of a merger between the company and Satyam anytime soon. CNBC-TV18's Kenan Machado reports.

Here is a verbatim transcript of Kenan Machado's comments on CNBC-TV18. Also watch the accompanying video.

Tech Mahindra has addressed a town hall Satyam employees and Vineet Nayyar of Tech Mahindra has indicated that there is no possibility of a merger between Tech Mahindra and Satyam anytime soon.

A crucial financial point is being discussed and one must remember that it is the first time the Tech Mahindra team is meeting the Satyam Management and it’s the crucial Rs 1,200 crore that the Raju family had lend to Satyam and its group companies. This we believe the Board had not put in as liabilities, outgoings, future outgoings or dues and that crucial point is to be discussed today.

The legal advisors of Satyam are a going to be a part of Satyam. That is something which Tech Mahindra would sort to clarify and get some more data as it is going to be the majority partner. The crucial point is that information which is being shared by Tech Mahindra could also be shared with the minority shareholders.

Another crucial point which is to be discussed today is that Satyam board member had indicated that Satyam was running a 10% excess work force and there would be a need to trim down. On the other hand, Anand Mahindra during his press conference had said that they would be not going in for largescale layoffs or at least that was the intention.

TCS bets on local market, aims to double revenue

IT giant Tata Consultancy Services (TCS) is betting big on the Indian market. The firm that has crossed $500 million in annual revenue in FY09 from the country expects to double its revenue figure in the next three to four years.

Natrajan Chandrasekaran, executive director and chief operating officer of TCS, said, “We are doing well in this market in sectors like BFSI, utilities, telecom, retail and e-governance. The growth rate is in double digits. Considering that, we are seeing IT spend increase in this market, we expect revenues of over $500 million to double in 3-4 years.’’

Chandrasekaran said that India along with other emerging markets like Asia-Pacific, West Asia, Africa and Latin America would be the key focus area for TCS. “We expect to grow at much higher growth rates in these geographies,’’ he added.

These four regions including India accounted for $1.1 billion, or 19 per cent, of the total revenue of $6 billion in the fiscal year 2008-09 — this is equal to the income TCS derives from just UK.

But with the economic downturn and its impact on IT spending in their main markets of the US and Europe, Indian IT companies are increasingly turning their focus to domestic clients and emerging markets.

However, Chandrasekaran did admit that the percentage of annuity revenues in these markets was lower than in mature markets. “There are more project-based transactions and hence we need to win more projects to sustain revenues,” he opined.

With respect to deals in the pipeline, he said, “The difference between deals now and one year ago is that earlier contracts were delayed or cancelled because market uncertainty was not foreseen by clients. It became difficult for these proposals to come to fruition. The scene has changed now with companies proposing deals keeping the conditions in mind.’’ He added that the deal flow this year would be normal.

IT majors ask staff to use public transport

Source: siliconindia
Many techies in Pune, who have been using air-conditioned cabs and luxurious coaches to travel to work, will now have to resort to public transport buses for their daily commute as cost pressures are forcing IT majors like Infosys Technologies, Tech Mahindra and Tata Consultancy Services (TCS) to opt for public transport buses that come at cheaper rates and have a better reach in the city, reported Business Standard.

Infosys Technologies has recently requested Pune Mahanagar Parivahan Mahamandal (PMPML), the local public transport body in Pune, to allow it an additional 20 buses to ferry its staffers from all over the city to its office locations in Hinjewadi. The company already has 16 PMPML buses operating for its staffers for some time.

Following suit is TCS, which also has placed a request for 13 PMPML buses within Pune city. "IT companies have been considering PMPML for transportation of staffers. We provide cheaper and safe service that has better reach and efficiency. Infosys, especially has asked for CNG buses, which we are trying to provide. We have excellent low-emission buses that would soon be deployed to ferry Infosys staffers," PMPML Managing Director Nitin Khade said.

Wipro Technologies and Tech Mahindra, too, are reportedly exploring possibilities to hire PMPML services instead of private bus operators. Infosys and TCS confirmed that they have placed requests with PMPML.

The advantage PMPML stands to get by providing bus service to IT companies is higher compensation than average running. The PMPML charges between Rs 55,000 to Rs 60,000 per month, for a single bus with a 50-passenger capacity. If a company hires a bus from a private operator, the monthly charge for a 50-seater bus goes up to Rs 68,000.

"Information technology companies have realized the advantages of ferrying employees in PMPML buses as against private buses. Hence, we are getting more and more demand for transportation services. Apart from Infosys, we expect services to TCS and Tech Mahindra companies will also begin soon," said PMPML traffic manager Sunil Gavali.

A number of IT professionals expressed satisfaction over the PMPML service. "We used to think public transport is pathetically maintained. But we are ferried in good buses and the service is really prompt," said K Sandeep, working with Infosys Technologies.

U.S. Is Said to Push Chrysler to Prepare for Chapter 11

The Treasury Department is directing Chrysler to prepare a Chapter 11 bankruptcy filing that could come as soon as next week, people with direct knowledge of the action said Thursday.

The Treasury has an agreement in principle with the United Automobile Workers union, whose members’ pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing, said these people, who asked for anonymity because they were not authorized to discuss the case.

Moreover, Fiat of Italy would complete its alliance with Chrysler while the company is under bankruptcy protection.

Thursday, April 23, 2009

Top 4 IT firms continue to face the slowdown heat

Wipro sees a silver lining in Q1; others say recovery by 2009-end. Results for the fourth quarter ended March 31, 2009, and full-year numbers (except for HCL Technologies, which declared its third-quarter results) of the top four information technology (IT) firms reflect the pain the sector has been feeling in the past two quarters due to the global slowdown.

When compared with the trailing (October-December 2008) quarter, only HCL Technologies posted a jump in revenue (of 16 per cent). However, this was primarily due to revenue from the recently acquired Axon group. Wipro saw a dip of nearly 3 per cent in revenue, Infosys a 2.6 per cent decline and Tata Consultancy Services (TCS) a dip of 1.5 per cent (it would have been lower if the estimated $71 million from the recent acquisition of TCS eServe, former Citigroup Global Services, was not added).

The low top-line growth was primarily due to lower rise in volume and lower prices (due to renegotiation), slow decision-making and cut in IT spending by companies.

iGate freezes hiring till Q3

Software firm iGate today said it has put a freeze on hiring till the third quarter of the current calendar year, when it expects a bounce-back in the global economy.

"We have frozen hiring. We will not hire till the economic condition improves which we expect to happen in the third quarter of the current calendar year," iGate CEO
Phaneesh Murthy said.

Besides, Murthy is optimistic that the offshoring companies would see some kind of recovery from the third quarter of 2009.

"(The) third quarter of the calendar year, I believe, will start seeing some kind of recovery for offshore companies," he said.

As of March 2009, iGate has 6,492 employees, a net reduction of 74 employees as compared to the same period last year.

"The company has not laid-off any employee and will not lay off either. We have a total employee strength of a little over 6,000 and out of that 1,200 are on the bench," Murthy said, adding, the reduction in headcount during the quarter was mainly because of attrition.

"We are cutting down on wasteful expenditure... We are focusing on non-traditional areas like travel, power and paper consumption, for streamlining our costs to beat the
recession," Murthy said.

No layoff in HCL, says CEO

Software exporter HCL Technologies today said it was among the few companies which had not made any layoffs since “we anticipated the meltdown in July and applied the brakes”, CEO Mr Vineet Nayyar said. Addressing the media here today, the HCL chairman, Mr Shiv Nadar, said: “HCL’s investments in new growth engines, innovative service offerings and value centricity have helped us convert today’s challenging market environment into opportunities for growth. HCL’s leadership in the industry in having a robust growth pipeline this quarter is a proof that this strategy is paying off.”

He said the company would also repay a part of the $585 million debt it had taken for acquiring UK-based Axon last year from its current cash balance and through a fresh loan. “We had raised a debt of $585 million for acquiring Axon which is maturing in December 2009. We have a cash position of $412 million. We will pay the debt out of the cash and raise a small debt,” executive vice-president (finance), Mr Anil Chanana said.

Gartner: India to Get Even Bigger in Outsourcing

India's share of the market is set to double between 2008 and 2010, says Gartner, citing demand for cheaper options during a global recession.

According to Gartner, Indian companies' share of the BPO market is set to double between 2008 and 2010. The analyst house puts the growth down to thirst for cheap BPO spurred by the recession. North America and the United Kingdom have shown the strongest growth for Indian BPO, according to Gartner, which found the telecommunications, manufacturing, insurance and banking sectors among the keenest users of Indian BPO, with public sector and retail among the most reluctant users.

According to Gartner, the top 20 India-centric BPO companies generated US$4 billion in revenue in 2008—5 percent of the US$80 billion created by the biggest 150 business process outsourcers worldwide.

HSBC fires 100 more

A new wave of firings is feared at financial institutions in Hong Kong after HSBC axed 100 staff from its private-banking division.

Changing market conditions were yesterday blamed for the decision to slash about 8 percent of 1,200 staff at the local unit. A Hong Kong-based HSBC spokeswoman said the cuts followed "a review of the business to ensure it remains competitive and well-placed to serve its clients."

Job losses were across-the-board, affecting both frontline and support staff. They were also broad-based in terms of seniority, ranging from administrative staff to management.

T Rowe Price earnings drop, cuts 288 jobs

* T Rowe Price first-qtr earnings drop 68 percent
* Company cuts 5.5 percent of its workforce
* Layoffs to lower operating earnings by $2.5 mln in Q2
* Job cuts to save company $17 million
T Rowe Price Group reported a 68 percent drop in first-quarter profit on Wednesday
and announced its first sizable job cuts in eight years but also said it took in new money.

The company, which has been managing money in Baltimore for 72 years, reported $4.5 billion of inflows and distinguished itself from most rivals who are expected to report outflows.

Wednesday, April 22, 2009

TCS’ new mantra: Cost-cutting

Tata Consultancy Services (TCS), India's largest IT outsourcing firm, said on Tuesday that price competition will force it to focus on cost reductions in coming years.

Even though competition is intensifying as customers seek cost reductions, Tata's earnings in fiscal 2010 should be higher than the year earlier, Chief Executive S Ramadorai said.

"I would like to see a 10 per cent year-on-year improvement" in cost reduction, he said. Tata Consultancy Services Ltd posted a 4.6 per cent rise in quarterly profit, but it expects prices to fall by lower single digits in the coming year.

"Profits will continue to rise, but at a slow pace," he said. "That is what we hope.”

"The challenges are definitely cost rationalisation and offshore leveraging," Ramadorai added.

Despite the pressure on prices, he said the company would try to avoid being drawn into a price war with competitors. "Growth has come down dramatically from what we were used to...So automatically, the focus of the organisation has been on looking at our internal efficiencies," Ramadorai said.

Prices of IT outsourcing services will shrink 5 per cent to 20 per cent through 2010 due to the uncertain economic climate, IT budget constraints and competition between vendors, research company Gartner predicted last month.

TCS's headcount has more than doubled over the past three years to about 144,500, but in fiscal 2010 -- which began on April 1 -- the company expects to add only about 16,000-17,000 new net hires, about half the number in the previous year.

The pressure on Tata is heavy because 43 per cent of its business comes from the global financial industry, which has taken the brunt of the economic crisis.

India's $60 billion sector, which provides services from software coding to managing computer networks and call centres, faces weak demand, cut-rate prices and rising competition from global rivals such as IBM.

Oracle-Sun deal may see job cuts

Oracle Corp, the software maker that has digested more than $34.5 billion in acquisitions since 2005, needs to cut thousands of jobs to achieve the profit projected from its Sun Microsystems Inc takeover, analysts say.

Oracle President Safra Catz said the purchase would yield more profit in its first year than those of PeopleSoft Inc, Siebel Systems Inc and BEA Systems Inc combined.

Oracle will have to trim at least 5,000 jobs, mainly in the declining hardware division, according to Mark Demos, a portfolio manager at Fifth Third Asset Management.
More from TheEconomicTimes

Yahoo to cut 5% jobs; Q1 profit in line

Yahoo! on Tuesday reported that its net profit slumped nearly 80 percent in the first three months of the year and that it will trim its workforce by five percent to cut costs. Shares of the Internet company rose 1 percent in after-hours trading.

In the first full three-month period under the leadership of CEO Carol Bartz, Yahoo generated revenue of $1.58 billion, compared with $1.82 billion at this time last year. Excluding traffic acquisition costs, Yahoo's revenue was $1.16 billion compared with the average analyst expectation of $1.2 billion according to Reuters Estimates.

Tuesday, April 21, 2009


Non-Bangalore employees duck Infy axe

Source: BusinessStandard
The lack of tolerance for non-performance at Infosys Technologies Ltd appears to be confined to Bangalore so far. The layoffs and outplacements of some 2,100 staff in mid-March by the Bangalore-based IT firm comprised 3.5 per cent of the 60,000 people who were put through the annual performance appraisal exercise. Of this, just about 0.4 per cent comprised employees based in non-Bangalore centres, according to information given by the company.

“Employees who have been consistently demonstrating poor performance were counselled out. Less than 1 per cent of our 11,250 employees in Chennai and 11,496 employees in Hyderabad have been impacted. As for the Thiruvananthapuram centre, less than 1 per cent of the 1,800 employees were impacted,” said Mohandas Pai, member of the board, director, human resources, Infosys Technologies, said.

Infosys has been following a performance management system wherein employees are categorised into various groups based on performance. People who have the potential or the attitude to improve performance are put on a personal development plan. Otherwise, they are ‘outplaced’ — provided with resources to find a job with another company. “This is a regular process that we have been following for many years,” Pai said.

He did not comment on how the company would be deploying the fresher intake of over 16,000 people planned for fiscal 2010, or how it would affect bench numbers at the company. “The bench strength is around 4,000, of which 1,300 are in internal projects. Our utilisation rate for the March quarter is 74.3 per cent (excluding trainees),” Pai said.

Infosys officials have stressed that all new staff joining the company would be “gainfully employed” on internal and ongoing projects after completion of their training period. Infosys has increased its trainee probation periods from four to seven months, partly to control variable costs and partly in anticipation of a sluggish project pipeline till September this year.

During the fourth quarter of 2009 ended March 31, 2009, Infosys lost four clients, while its top 10 clients slashed their IT budgets by at least 10 per cent. As things stand, the company is trying trying to mitigate the impact of the global economic slowdown by freezing employee increments, bonuses and slashing variable pay, which in the case of many employees at the executive level, constitutes 85 per cent of the salary.

Pai dismissed apprehensions of layoffs happening from among the freshers set to join the company in case the bench numbers increase disproportionately. “Our model does not envisage this (layoffs) at this point of time,” he said.

At an employee count of 105,000 people currently, Infosys has 45,000 trainees on its rolls, and is hiring 16,000 students passing out in July 2009 as part of honouring its employment commitments. Another 2,000 people are to be recruited laterally by the second quarter of 2009-10.

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