Satyam employees may get 9 months severance package with pink slips

According to sources:
Severance package may include: 3 months full salary and 6 months half of the salary. Satyam may offer (those 10K employees who will be laid off in June) back to join the company if there are new projects after 9 months. In the mean time, they can join with another company or they can try for Satyam.

Satyam’s new owner Tech Mahindra hinted at a possible reduction in staff as it said on Friday that the company has 10,000 excess employees and revenues are coming down.

“Some form of a least painful way of reduction in staff is an option which will have to be looked at,” said Tech Mahindra’s CEO, Mr Vineet Nayyar, after the board meeting of government-appointed Satyam directors and officials of Tech Mahindra.

Mr Nayyar said that some sacrifices will have to be made (in order to run the company successfully). “If Satyam failed, some 40,000 people would be out of jobs,” he said.

Tech Mahindra unit Venturbay Consultants had taken controlling stake in Satyam in April. However, Satyam’s chairman, Mr Kiran Karnik, said that the company is not looking at mass lay-offs. It is exploring the sabbatical and a virtual bench strategy as measures to cut costs. “Without a doubt, revenue is on a downward trend, there is definitely stress on the bottom line. We are hoping to pick up, but the pick-up will not happen immediately,” said Mr Karnik.

He said that the customer side has become stable. The board meeting discussed measures to cut costs. Mr Karnik said that Satyam had high operating costs and the new owner would decide on how to bring it down. He said that it would take KPMG and Deloitte six months to restate the accounts.

Meanwhile four nominee directors of Tech Mahindra, including Mr Nayyar, were on Friday appointed on the board of Satyam Computers, with effect from June 1.