Tuesday, June 30, 2009


Accenture Profit Beats Estimates on Demand for Outsourcing

Accenture Ltd., the world’s second- largest technology-consulting firm, reported third-quarter profit that beat analysts’ estimates as customers outsourced work to curb costs in the recession.

Net income was $444 million, or 68 cents a share, compared with $469.1 million, or 74 cents, a year earlier, Accenture said today in a statement. That exceeded the 64-cent average estimate of analysts in a Bloomberg survey. Sales fell 16 percent to $5.54 billion.

Accenture’s customers are farming out tasks such as accounting or management of software applications to reduce costs in the worst global recession since at least World War II. The outsourcing business accounts for up about 40 percent of the Hamilton, Bermuda-based company’s revenue. Analysts estimated sales of $5.29 billion for the quarter ended May 31.

Aspiring engineers scared to opt for IT courses

The students who are aspiring for engineering career are opting for mechanical and civil engineering courses instead of IT courses. According to Karnataka Examinations Authority (KEA), around 60-70 percent of almost 1.2 lakh students who appeared for common entrance test (CET) this year are expected to opt for non-IT courses. Also many courses like computer engineering, medical and biotechnology which were in demand last year do not have many takers this year.

The change in career can be linked with big IT companies like Wipro, Infosys and TCS deciding to cut down the number of recruitment due to recession. Big companies are also seeking to cut down on existing staff to adapt to economic slowdown. In such situation students are not that ready to take risk by entering the IT field. "In times of recession, nobody is daring to opt for IT. There are more job opportunities in mechanical. Lot of students that I know prefer to go into electronics and communication and mechanical engineering," an aspiring engineering student Bhavish Kuttapa told Economic Times.

Many students are interested in opting for telecommunication engineering as there are more jobs available in that field. It is expected from students to opt for recession-proof careers. "Something very similar happened few years ago when IT was doing better than other sectors. With government spending big on infrastructure, energy and telecom, there are more jobs available for mechanical, civil and electronic engineers," said GC Jayaprakash, principal consultant at executive search firm Stanton Chase International to economic times.

Restructuring dampens work spirit at Mahindra Satyam

'The reorganisation is very aggressive and the parameters are not clear'.
Just around three weeks earlier, employees of Mahindra Satyam (then Satyam Computer Services) could hardly contain their joy. On the back of good positive top- and bottom-line figures for the third quarter (October-December 2008) and January-February months of CY2009, and bagging of new business orders worth $380 million (around Rs 1,800 crore), they were seen distributing sweets to their peers at various campuses of the IT outsourcing company in Hyderabad.

The mood appears to have changed dramatically. Despite the new chief executive officer of Mahindra Satyam assuring them the company and its employees (known as associates) have a great future, most associates this paper spoke to are confused and worried about the goings-on at the workplace.

While the reality of the ‘virtual pool’ is sinking in gradually, the simultaneous reshuflle at Mahindra Satyam is scaring them. “The reorganisation is very aggressive and the parameters are not clear,’’ said one associate who operates from the Infocity campus. “There is no excitement at the office for the last two or three weeks,’’ he said.

There are reasons for this despondency. He has seen a team handling a vertical dismantled. “There were two seniors at the helm of affairs and one of them has been asked to leave,’’ he said about the changes. Only last week, Mahindra Satyam had brought the roles of about 70 to 80 senior leaders under the scanner.

The company is now looking for talent from within the organisation to head some positions after the rejig. In some cases, the company is also getting people from Tech Mahindra to fill the lacunae created due to the reorganisation of staff, he said.

“The mandate is clear for all of us. We have to be ready to don a new role,’’ said another associate. He said the company has now broken down the earlier multiple levels of reporting for a particular task. “This would result in most of the employees coming in the direct firing line of higher-ups and therefore more accountable and also vulnerable at the same time. Also, another round of restructuring at the employee level is on the cards,” he added.

Some associates, according to another employee, are finding it difficult to work as there is no information from the right channel on the rejig or the direction it is heading. On the letter to the associates from the new chief executive officer, seeing a great future for the company, he said the letter did not address the uncertainty the employees were now experiencing.

“We are not feeling like attending the work,’’ he said, adding there is an increased activity at the office but the outcomes are not defined. But there are also some associates who are charged up after reading the letter from CP (Gurnani). “There are signs that the troubled times are coming to an end. Lot of fresh ideas are flowing in,’’ said another employee, talking about the delayering happening at the Mahindra Satyam. The effort is to cut the costs and increase productivity.

“The letter from CP is a boost to the associates,’’ said one Satyamite, who started his career with it and would not move out of it on his own. “There is future for us,’’ he said recollecting CP’s words.

Of course, there are those who are still searching for career opportunities outside of Satyam. Besides, many members of the Satyam Freshers’ Union, a body floated to take up the grievances of freshers who got offer letters from the company but never got to join work, are now searching for job opportunities outside.

PW auditors’ bail plea dismissed
The Andhra Pradesh High Court today dismissed the bail plea filed by Price Waterhouse auditors — S Gopalakrishnan and Srinivas — accused in the case relating to the financial scam at Satyam Computer Services.

The case came up for hearing last week but the orders were reserved for today.

The CBI argued that the two auditors have failed in their duties to reject inflated figures in the balance sheets for successive years. They were also party to the financial scam, they said. There was no merit in saying that they did not identify the inflated figures or they simply relied on the documents provided by the company, the prosecution argued.
Source: BusinessStandard

Cognizant big on mobile couponing

Betting on mobile applications as a growth area, IT major Cognizant is developing a new solution for mobile couponing. Mobile couponing is a process of receiving and redeeming merchant disc-ount coupons electronically using a mobile instrument and network instead of conventional paper coupons.

Said R Viswakumar, AVP, global technology officer, Cognizant: “We are exploring this emerging business need and developing a solution by identifying and creating specific technology components.”

The solution would be piloted in Cognizant first and then launched along with merchants, mobile operators, banks and pay-ment companies in a phased manner. The trans-border company has discussed the idea with a few existing clients and the response so far has been encouraging, said Viswakumar.

Researches suggest that mobile phones are fast replacing 300 billion paper coupons issued every year in the US. Brands such as Burger King, Dairy Queen, Victoria’s Secret, Unilever and ShopRite have starting using mobile coupons in various forms.

Deloitte eyes Mahindra Satyam auditor post

Audit firm Deloitte India has opted out of the work on restatement of Satyam accounts, perhaps in antici-pation of getting auditing assignment for Mahindra Satyam. Deloitte has been looking into Satyam books of past seven years, along with KPMG since January, after the scam broke out.

Mahindra Satyam is yet to appoint a statutory audi-tor. A Satyam spokesperson in Hyderabad said that no auditor had been appointed, “because it has to be done by the shareholders at the AGM.” At the same time, moves are afoot to merge Tech Mahindra and Mahin-dra Satyam.
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UK's Lloyds banks on Wipro, TCS staff

Even as protectionism gains ground among political hardliners in the UK and US, UK-based Lloyds Bank has initiated the process of replacing most its British IT workers with Indian nationals. Many of the Indian recruits will be from top-rung Indian IT majors like Wipro and TCS, who are also the bank’s vendors, said two industry officials familiar with the development.

The bank, which has over 400 employees in its IT department, is learnt to be considering replacing over 80% of its IT workforce with those from India. “We continue to outsource areas of IT work to companies based overseas. At any one time, some of the staff from these companies will be based in the UK to deliver aspects of our IT projects which is standard industry practice, “ said a Lloyds spokeswoman over email. She added that the number of staff from overseas companies working with Lloyds in the UK varied depending on the projects underway and the skills required. TCS declined to comment since it was in the midst of its silent period while Wipro refrained from comemnting on “market speculation.”

Globally, the economic crisis ahs resulted in serious cost-cutting measures which includes wage cuts. For example, an Indian IT specialist with over four years of experience, will be paid almost 30% lesser than his British counterpart. “The costs pressures for companies in Europe and US are forcing companies to lay off workers and replace them with more inexpensive labour mostly from India and China,” said a UK-based consultant who advises European banks on outsourcing strategies. Last week, the Lloyds Banking Group’s employee union protested on a move to replace skilled IT workers of British origin with those fom India.

“Workers from India, who would otherwise have no legal right to work in the UK, are being given work visas and flown into the country to take on jobs that could otherwise be given to the existing UK-based staff. The UK government should be using its 43% ownership in Lloyds to force the bank’s board to act in the best interest of UK jobs and its economy,” the union’s assistant general secretary Steve Tatlow had said last week.

Nilekani wants 'best talent'

Leading the ambitious Unique Identification Database project, Nandan Nilekani, former Infosys co-chairman, is keen to take the "best people" from the government and outside in his core team.

Nilekani said that in his book, 'Imagining India', he had devoted a chapter on using technology to transform the country and was happy that he could come close to implementing it in reality with this project. "I am happy that the Prime Minister has reposed trust in me," he told PTI.

On the flexibility of drawing resources to build his core team, he said, "It is a national effort. I would look for the best people. It could be from the government, from outside".

Asked whether his former colleagues would form part of the team, he said it was too early to say. "I want the best talent," he added.

Recovery to begin soon: Google

A US recovery is likely to begin this autumn, the worst of the crisis has passed and it is "reasonable to be optimistic for 2010," internet search giant Google's chief executive Eric Schmidt has said.

Speaking at the Cannes Lions advertising festival in southern France, Schmidt said US jobless claims indicated "the beginning of the bottom." "The rate of jobless claims is decreasing although the absolute number is increasing," he explained.

Schmidt said he did not want to comment on a report that Google had set up a team of engineers to study the technical specifications of Bing, the search engine launched recently by Google rival Microsoft, as he had not seen it.

But he added: "Bing is a competitor. We have absolutely looked at Bing; we have actually studied what they do as Microsoft studied what Google does."

Microsoft's Bing search engine has been winning US market share from its rivals but is still trailing Google and Yahoo Inc. Bing will be launched in the UK in the autumn and a test version is already available in Europe.

Air India agrees to pay salaries to some employees on July 3

The standoff between Air India and its employee unions over delayed salaries is now over. The airlines would pay salaries of nearly 24,000 of its 32,000 employees on July 3. Air India had earlier said that the salaries of employees would be paid on July 15.

Thousands Air India employees, had staged a sit-in on Friday at their respective stations across the nation to protest against the airline management's decision to defer payment of their salaries by a fortnight. Hundreds of AI employees, associated with the three unions—ACEU, Aviation Industry Employees Guild (AIEG) and Indian Aircraft Technician's Association (IATA)—protested near the office of the airline's Executive Director's (Northern Region) at the IGI airport in New Delhi.

About 24,000 AI employees, associated with the three unions, had earlier decided to wear black badges from June 22 to 25 as mark of protest. They had said if the management fails to issue their salaries on June 30, they would boycott their duties under the "no pay no work" policy, which is likely to affect the operations of the national carrier.

On Thursday, during their meeting with Air India Chairman-cum-Managing Director Arvind Jadhav, the unions had refused any renegotiation of wage agreement with the management after it proposed a wage cut to employees to tide over the financial crunch faced by the airlines.

The unions also demanded a re-look by the management into the company's new aircraft acquisition policy as it has substantially contributed to the air carrier's present financial difficulties.

Avatech Solutions lays off 41

Avatech Solutions Inc. cut another 41 people from its work force Friday. The layoffs follow a 10 percent reduction in employees in April, when Avatech had about 200 workers. Now it has 146, the company said in a Securities and Exchange Commission filing.

Monday, June 29, 2009


Wipro to slash variable pay by half

Employees who are on the bench for at least 60 days in a quarter to be affected.
To cut costs further, Wipro Technologies, India’s third largest information technology services provider, is understood to have effected a 50 per cent cut in the variable pay of a certain band of employees who are not billable (on the bench) for at least 60 days in a quarter.

Last year, the company had cut the variable pay of employees who were not billable for at least 75 days in a quarter. The new policy was made effective from the first quarter of fiscal year 2010.

The variable pay policy in Wipro, which is known as the Quarterly Performance Linked Compensation (QPLC), is decided every year and given to the employees on a quarterly basis. Wipro decides the QPLC of employees based on their level and seniority in the organisation. The company has decided to give variable pay to a certain band of employees (e.g. project managers) only when their respective business units achieve 80 per cent of the business targets set for the quarter.

Company sources say variable components comprise around 10 per cent of most Wipro employees’ total cost to the company (CTC). So, the overall compensation of the employees who are not billable for at least 60 days in a quarter will be impacted by around 5 per cent.

Wipro’s HR Head Pratik Kumar said, “We revisit our variable plan every year. This year, fundamentally we have not changed anything.” He added that “it (the 60-day number) is too specific a number to comment on.” He, however, added that the individual billability-linked system has been there in the company for the past two-three years. “This is not something we have introduced recently.”

Wipro had 97,810 employees as of March 31, which includes 74,986 working with the company’s IT services business. Of these, close to 8,000 are on the bench. However, not all will be affected, since in the case of a certain level of employees — who are primarily into sales and support roles — the QPLC has been linked to the performance of the overall (IT) business of the company. For employees belonging to certain other bands, it has been linked to the profitability of their respective business units, as well as the company’s overall business performance.

The QPLC of the third category, which comprises primarily software engineers and constitutes the largest chunk of the overall employees, is linked to an individual’s billability factor and the performance of the company. The individual billability factor and the performance of the company is being given equal weightage while deciding a variable pay of the employees in a particular quarter, for this third category of employees.
Courtesy: BusinessStandard
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Pink slip fear drives Bangalore techies to docs

Source: EconomicTimes
IT professionals in this tech hub are battling the global downturn with the help of doctors. Living under the constant fear of losing their jobs or trauma of seeing their colleagues getting the pink slip, the techies are increasingly seeking medical help to survive what experts call the "layoff survivor syndrome".

The intensity of the syndrome could become severe when a team member working on a project is benched or sent out, a leading psychiatrist said.

"It's a mental situation where IT professionals who of late have seen their colleagues, who are often friends too, being laid off," B.N. Gangadhar, professor of psychiatry at the premier National Institute of Mental Health and Neuro Sciences (NIMHANS) here, told IANS.

"First, it is the anxiety that the axe may fall upon them the next time and, secondly, a sense of remorse, with a tinge of guilt that they have survived, whereas their colleagues sitting next to them have lost jobs," Gangadhar said.

Two million people were employed in the Indian IT and BPO industry in 2007-08, according to the National Association of Software and Service Companies (Nasscom). The BPO sector employed more than 700,000 people.

"These are bad times. Recently two of my colleagues, who are also close friends, were fired. I am feeling terrible after the episode," said Sundar Gopal working with a reputed Indian IT company.

UNITES professionals (Union of Information Technology Enabled Services Professionals), says there is no clear estimate of the job loss in these sectors in the wake of the global economic meltdown.

Though UNITES claims that such unions have been formed in several countries, they are not recognised as a trade union either by the governments or employers.

"Every other employed IT professional is thinking that it's their turn next," rues Karthik Shekhar, general secretary of UNITES-Bangalore told IANS.

UNITES-Bangalore says it has more than 50,000 members.

"Those who are still employed are working under great mental stress, which is taking a toll on their work and professional growth also," Shekhar asserted.

UNITES-Bangalore contends that the employers are not helping their staff to deal with the mental trauma of being laid off.

"The companies are not giving any kind of counselling before handing over pink slips to their employees. This leaves the employees distraught. The companies should provide some kind of counselling in not only giving mental solace to their employees but also some amount of guidance in helping them find an alternative means of livelihood," said Shekhar.

Several Bangalore hospitals say they are seeing increased number of IT professionals seeking help.

"We're getting two types of IT professionals seeking our help. First are those who have already lost their jobs and second are those who're fighting the fear that they might lose their jobs soon," said M. Srihari, a psychiatrist with the state government-run Bangalore Medical College.

"After counselling and medical aid, many have improved, but some are too shocked to believe that they have lost their jobs or their colleagues have lost their jobs," Srihari added.

He has a suggestion, particularly for youngsters.

"Losing a job is not the end of life. Life has many things in store and they could easily try various options to rise again," added Srihari.

From the sprawling campuses of IT majors to the small backroom offices in the city the "psychological pressure" under which the staff goes about the daily work is evident when one talks to them.

Ramaya P., employed at a multinational company, said every day she works under the fear of being fired the next moment.

"Insecurity is palpable everywhere. I have heard of cases of so many people getting pink slips in recent times. My stress level has increased," said Ramya, who added she has not yet thought of going to a counsellor.

Asked how she is tackling the situation, Ramya said: "I only hope the situation improves soon."

Who will replace Nilekani?

Infosys has not named anybody who would fill Nandan Nilekani's shoes but expressed confidence that leadership transition would be a smooth affair as was in the past. "There is no discussion on this (Nilekani's replacement) as of now," an Infosys spokesperson said on Friday.

According to industry sources, Mohandas Pai, HR head and a board member, is likely to succeed Nilekani. However, when asked the company declined to comment on this. "There are two things -- one is as a member of the Board he (Nilekani) has resigned and the Board has to decide whether he needs to be replaced or not. Right now there are no discussions on that," Infosys CEO Kris Gopalakrishnan said talking to private television news channel CNBC TV18.

"On his executive role, other people will take over ... we have exceptional leadership. Infosys will manage this without loosing any momentum as we have done in the past," he added. Analysts also feel that leadership transition would not be a problem for Infosys. From Narayana Murthy to Nilekani to Kris now, it has always been a glitchless affair, they pointed out. Nilekani yesterday resigned as Infosys co-chairman and a board member. The board has accepted his resignation.

US immigration rules blamed for brain drain

Silicon Valley is facing a brain drain of high-achieving foreign-born students, more of who are leaving in the face of a chilly local immigration envi-ronment in a trend experts say will hurt US high-tech industry competitiveness in the long run. A more attractive employment environment over-seas and a bad local economy are increasingly prompting graduates to head home in search of rosier prospects. This is depriving the Valley — often called the cradle of global tech innovation — the fresh blood it needs to remain at the vanguard of hot new industries such as clean technology.

“I believe we are going to innovate our way out of the economic woes we have, and in order to do that you need innovators,” Zoe Lofgren, a Democrat who chairs the immigration subcommittee, said. “It means not sending out people who are innovators who want to become Americans,” said Lofgren, one of the congressional leaders who will meet this week to discuss the matter with president Obama.

More than half the start-ups that emerged from 1995 to 2005 in Silicon Valley — the area near Stanford University in Northern California that spawned the likes of Intel and Apple — had a founder who was a foreign-born national, according to a 2007 study by Duke University professor Vivek Wadhwa. But many foreigners now face a long wait for permanent residence and have come to believe that will never change.

Ken Wilcox, president of Silicon Valley Bank in Santa Clara, said the US now faces an imperative to help talented foreigners stay. “We’re simply not producing, in relative terms, significant numbers of engineers or scientists from people who have already been here for a number of generations,” said Wilcox, who specialises in helping the start-ups that gave his bank its name. “You’ve got to bring them in from the outside.”

Foreign nationals earn half the master’s degrees and 71 per cent of the doctorates in electrical engineering at US universities, according to the House immigration subcommittee. But they are increasingly unlikely to stay. Duke University’s Wadwha said the US lost 100,000 highly educated foreigners over the last 20 years, but faces accelerating losses of 100,000 to 200,000 in the next five years. “The US is experiencing a brain drain and doesn’t even know what that means,” he said.

The combination of better job climates in India and China and seemingly interminable waits for US permanent resident status has changed the calculus for most students, he said. Wadhwa said 60 of the 65 foreign engineers among the 120 he helped train this year to be business executives are leaving for India, China, and Turkey.

Africa a call center alternative to India?

Some US lawmakers and think tanks believe that Africa can be a much cheaper alternative to call centers in India. The issue came up briefly for discussion during a Congressional hearing on US-Africa Trade relations. "Is there any possibility of having call centers in Africa, in your opinion?" asked Congressman Donald Payne, at the joint hearing convened by Subcommittee on Africa and Global Health of the House Foreign Affairs Committee and the Subcommittee on Commerce, Trade and Consumer Protection of the House Committee on Energy and Commerce.

"I don't know whether that has been explored," said Karen Tandy, senior vice president, public affairs and communications, Motorola. "However, it makes sense that it is certainly possible in Africa," she said. "There are a tremendous number of entrepreneurs springing up throughout the continent that we are also investing and giving grant money to and technology, so there is no reason why a call center couldn't be part of the future in Africa," Tandy said.

"I would echo that," observed Greg Lebedev, adviser tothe president US Chamber of Commerce and Chairman, Center for International Private Enterprise. Africa has a wonder resource of English language speakers, he added. "Certainly, there is some market maturation in India right now and one could argue there might be cost-competitive advantages in Africa. So I think that, to your point and to Tandy's point, that's a sensible area in which to look," Lebedev said.

Tandy and Lebedev were responding to a question posed by Congressman Payne. "Are there any possibilities for that kind of -- even, why not have a call center in Ghana, where they speak English, or Kenya?" he asked. "You can probably less detect it than the Indians saying I'm Sam, you know, with this "I am Sam." But then I live down the street, so to speak," Payne said.

New GE centre adds more than 1,100 jobs in Michigan

General Electric, the world’s biggest maker of power-generation equip-ment and jet engines, opened a research centre that may add more than 1,100 jobs in Michigan, the state with the highest US unemployment rate. The Advanced Manu-facturing and Software Technology Centre will be about 40 km outside Detroit, the Fairfield, the company said. It will take advantage of a pool of out-of-work engineers and scientists as the US auto industry’s centre shrinks and GE develops more efficient products.

GE, also the world’s biggest maker of locomo-tives and medical-imaging machines, said it will invest about $100 million to build the new site and benefit from more than $60 million in state incentives over 12 years. “We’ve found Michigan to be aggressive and a good partner,” chief executive officer Jeffrey Immelt said in a news conference. “We view this as a long-term commitment. We’ve looked at this downturn as a way to launch more investment faster.”

The centre, which will create all new, Michigan-based jobs, will “definitely” include renewable energy components like wind turbines, said Immelt, who is on president Barack Obama’s board of economic advisers. GE is the biggest wind-turbine maker in the US. Existing space on the site will be used for software and health-care information-technology development, GE said. Immelt said the US must be a “strong exporting country” to help speed recovery from the economic slump.

Multibillion opportunity for Indian IT cos

A billion smart cards for a billion population. It throws up a multi-billion dollar business opportunity for domestic technology players. The eco-system required to support the citizen ID card programme, proposed by the Unique Identification Number Authority of India (UIDAI), is expected to be vast — comprising of data collectors /managers, delivery channels, chip designers, smart card manufacturers, application and software providers, system integrators, networking analysts and print companies.

Some estimate it will create at least a 100,000 additional jobs in the country in the next three years. An ancillary industry will also come up around this ecosystem . The entire ID card project is estimated to be in the range of around Rs 1.5 lakh crore, with the first phase — which will cover ultra urban, urban, and semi-urban populations — offering a Rs 6,500 crore business opportunity.

Companies like TCS and Infosys have confirmed that they will actively bid for the project. TCS has already been working with the government on projects like e-passport, Gujarat police and the defence ministry. “Since it is going to be an open bidding process, we will be bidding for it,” said a senior official at TCS.

“The entire process including the bidding process, deal negotiations and business evaluation, are expected to be transparent. There will not be any conflict of interest for us and therefore we will participate in the bid,” said a senior official at Infosys. Some 27 large egovernance projects worth Rs 40,000 crore are currently in the pipeline. After having been badly hit by the global meltdown, many tech leaders have been urging the government to accelerate these projects to induce economic buoyancy and create fresh jobs. The UIDAI comes as a quick response to the industry’s call.

Som Mittal, president of IT industry body Nasscom, was clearly delighted by the government’s move: “The project is a transformational project for the country as it will overlay many underlying projects, creating huge efficiencies for the country leading to enhanced governance and reduced costs.”

Indian Animation firms buck slowdown, see increase in orders

70% of animation studios' revenue comes from outsourced work. The Indian animation sector, it appears, has not been hit by the slowing economy. Rather, major players like Maya Entertainment, Tata Elxsi Visual Computing Labs, Toonz Animation India, DQ Entertainment International and Avitel have seen a rise in the number of deals in the recent months.

For instance, Mumbai-based Avitel recently set up its first post-production studio in India with an estimated net worth of Rs 750 crore. It has orders worth Rs150 crore. Avitel’s animation turnover is projected to shoot up to Rs 50 crore in 2009-2010, an increase of 400 per cent from last year’s Rs 13 crore.

Pradeep Jain, chairman and promoter of Avitel Post Studioz, feels the slowdown has been good for the animation industry in India as US studios looking to cut cost are shifting work to India.

“What this slowdown has done is to open the pre-production side of the business to Indian players. The Indian animation industry so far was restricted to the production side of the business, thus targeting only half the business. The current meltdown has opened doors for us to step into the pre-production side of the business also.”

Maya Entertainment, a leading animation studio, is another example. Jai Natrajan, Group Executive VP, Business Development and Marketing, said, “During the second half of the last fiscal, when the economic meltdown hit hard, we signed two large TV serials internationally. We recorded 30 per cent growth during the period. We also got Rs 25 crore worth of outsourcing orders.”

The Indian animation industry is currently pegged at Rs 1,740 crore and of the total revenue generated by the studios, over 70 per cent is derived from outsourcing, says the Ficci-KPMG Media and Entertainment Industry report 2009.

Analysts note that other than the cost advantage that India offers, studios here are coming up with world-class projects. A point in case being “Roadside Romeo”. Visual Effect Society had nominated Tata Elxsi for animation work in the film, along with movies like Wall-E, Kung Fu Panda and Waltz with Bashir and Bolt. The cost of producing a full-length animated movie in the US is $100-125 million, as compared with $25-30 million if work is outsourced to India.

Unlike the IT industry, where decisions have been slow and existing clients have not ramped up, the animation industry has seen the opposite. “We received repeat orders from our existing partners as well as several new productions,” said Sumedha Saraogi, vice-president, Management Office, DQ Entertainment International.

Saraogi agreed that while deal sizes had remained the same, the quantum of work had risen. “The deal size could vary depending on the format and the length of production as well as the scope of work that is outsourced. On an average, the deals are from Rs 4.7 crore to Rs 24 crore ($1-5 million),” she said.

Analysts agreed that while the outsourced business had not been impacted, a lot of changes had been introduced in the deals. “In many cases, prices have been renegotiated. Where one cannot do that, firms are looking at reducing cost. Firms may look at reducing the number of takes for creating a character or reduce the number of characters in the project. But one positive that has happened for the industry is that a number of small players that had mushroomed during the hype period have had to close down due to pricing pressures.”

“We have also signed co-production agreements for several 2D/ 3D projects. So, we have not been much affected by the ongoing crisis, except for some minor delays in fund flows,” said P Jaykumar, CEO, Toonz Animation India.

Sunday, June 28, 2009

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H1B Cap : June 19, 2009 Update

The USCIS cap count as of June 19, 2009 reports 44,500 regular cap cases. This is slightly higher than the cap count given on June 12, but is still lower than a count given for May 22, 2009. As of this writing, both the Advanced Degree and Regular H1B Caps remain open. We will continue to provide updated cap count information as it is made available.

Friday, June 26, 2009


Satyam may lay off mid level executives next

Now it is the turn of middle-level executives to be the victims of cost cutting. Mahindra Satyam plans to trim the role of its middle-level executives, from July 1. Around 70-80 senior leaders may soon become redundant, a company official confirmed.

This decision comes after the announcement that employees who have been furloughed due to lack of work may be fired. Around 8,500 idled employees may be fired in another six months unless the profits get better. The current management will be tested on accountability and the kind of work they have already done. The profits and losses their units have already made will be the measuring point for these employees.

Meanwhile, Ram Mynampati, former Satyam Executive Director is learnt to have put in his papers. He is replaced by Keshab Panda as the head of the healthcare vertical. Mynampati was also the interim CEO after Ramalinga Raju had confessed to the infamous fraud.

Mahindra Satyam CEO asks associates to stay united and committed

Within days of being named the chief executive officer of Mahindra Satyam (formerly Satyam Computer Services), C P Gurnani has laid down a blueprint to re-energise the company.

In a letter addressed to the associates (as the employees are referred to), Gurnani said the company had strengths in delivery excellence, and differentiated service offerings and domain experience. He said the organisation structure was already re-designed to make it more customer-centric and agile. The access to customers and geographic penetration is further enhanced, decision-making is being accelerated and a greater role is being given for the delivery teams in nurturing accounts.

“Let’s make a great future together. Let’s grow Mahindra Satyam into a leader displaying courage, remaining connected and with a sense of agility,’’ he said, adding it was possible only with the support of associates. “We need to stay united, committed and focused,’’ he told the associates.

The events following the confession of Satyam founder Ramalinga Raju in January had taken their toll on the company and have seriously dented its image, business and morale, he acknowledged.

After Tech Mahindra emerged as an investor in April, he said he travelled to meet the customers, associates and teams across the world. “All of them are interested in the future. I dream of an enterprise which remains connected to its customers, partners, influencers and the society in more ways than one,’’ Gurnani said.

He said he was interested in a future when Mahindra Satyam would be rated as the ‘happiest place to work in’, was ‘business savvy’, got invited to best business opportunities and won consulting and engineering services, when it emerged as ‘true partners’ of its customers, when it was recognised for its governance standards, transparency and values, when its associates were fearless and matched to business challenge.

He put on record the efforts of the board in reviving the company and the support of the families during difficult times.

IT majors vie for $250-mn Nissan contract

Japan’s third-biggest automaker Nissan has invited outsourcing companies including TCS, Wipro, IBM and Mahindra Satyam to bid for an application development and maintenance deal, potentially worth around $250 million.

Nissan, which currently works with Mahindra Satyam, among several other vendors, is among the other Japanese companies such as Sony and Toyota, who are seeking to reduce their operational costs by outsourcing IT and back-office projects to India. They are expected to spend around $2 billion on outsourcing with India-based vendors this year, according to experts tracking these contracts.

“Nissan has asked the vendors to bid for this contract. However, a significant local presence or partnership with another Japanese IT firm are among the key parameters the bidder has to follow,” said a senior executive at one of the tech firms exploring this opportunity. He requested anonymity because his company is not authorised to comment on any potential contract. When contacted by ET, officials at TCS, Wipro and Mahindra Satyam did not offer any specific comments. A Nissan spokesperson also did not respond to an email query sent by ET last week.

Japanese firms outsource IT contracts worth over $8 billion to countries, such as China, India, Korea and Vietnam every year, according to an expert, who requested anonymity. India’s share was around $1.5 billion last year, as Japanese customers continued to prefer neighbouring destinations, such as China, which accounted for almost $5 billion of work, and Korea, which exported software projects worth around $1 billion to the country.

Despite being a lucrative market for IT outsourcing, Indian companies have not really been able to make any significant inroads, especially since the Japanese customers still prefer to work more with local companies, apart from maintaining their in-house IT teams.

Fujitsu, IBM Japan, NEC and Nihon Unisys are among the established vendors in the country.

“Customers, such as Sony and Shinsei Bank, would start with smaller, even less than $1 million contracts, something Indian companies were not really keen to pursue until now,” said a Japan-based business head for an Indian IT company. He requested anonymity because he is not authorised to speak with media. “Customers, such as Toyota, still believe in maintaining large in-house IT departments,” he added.

Experts, such as Kazumasa Kuboki, director of Japan External Trade Organisation (Jetro), said that Indian companies need to be seen as local companies in order to gain more outsourcing business. “IBM Japan, for instance, is viewed as any other Japanese company by the customers,” he said. “Indian companies need to gain more confidence of Japanese customers by doing smaller, trial business,” he added.

This year could see new Japanese customers emerge for Indian software companies. Tokyo-based Sony announced recently that the company will make savings of over $2 billion by reducing operational costs at its electronics unit, apart from undertaking several restructuring measures, including outsourcing. Sony projected a full-year operating loss of around $2.9 billion for 2009, the company’s first loss in 14 years.

“Dearth of IT engineers and economic recession are among reasons for Japanese companies to increase their outsourcing this year,” Mr Kuboki said.

Japan, which spends almost 2.6% of its GDP on buying technology services and products every year, slipped to third
place after China became the world’s second biggest market for IT with around $143 billion spend last year, higher than $123 billion Japan spent, according to Forrester Research.

Nilekani: IT icon or rock star?

People may not be screaming his name out in offices, but he has his own fan following and enjoys rock star-like fame. Nandan M Nilekani has clearly emerged as the most famous of those who created India's widely idolised IT company - Infosys.

N R Narayana Murthy has probably had more media coverage but as the key people behind Infosys prepare to hand over control to the next generation of business leaders, it is Nilekani who looks all set to enjoy a great solo career.

Nilekani, 54, is already credited with repainting India's image globally and will now head an authority that will create a unique electronic database of the country's citizens - a project that many see as key to plugging loopholes in implementation of welfare schemes.

As chairperson of the country's Unique Identification Authority, Nilekani would enjoy the rank of Cabinet Minister. The electrical engineer from IIT, Bombay, who is the Co-Chairman of the Board of Directors of Infosys Technologies Limited, was named among Time magazine's world's 100 most influential people of 2009 - an honour he secured in 2006 too.

From March 2002 to June 22, 2007, he served as Chief Executive Officer and Managing Director and has previously held the posts of President and Chief Operating Officer of the company that he founded, along with Murthy and others, in 1981.

In January 2006, Nilekani became one of the youngest entrepreneurs to join 20 global leaders on the prestigious World Economic Forum (WEF) Foundation Board.

He also co-founded India's National Association of Software and Service Companies (NASSCOM). The IT czar has been involved in various initiatives of the central and state governments. He was the Chairman of the Government of India’s IT Task Force for power. He is a member of the National Knowledge Commission and also part of the National Advisory Group on e-Governance.

He is also a member of the review committee of the Jawaharlal Nehru National Urban Renewal Mission. He took over as the elected President of NCAER (the premier, independent, applied economics research institute in India) in April 2008.
Nilekani is the recipient of several awards. In 2006, he was conferred the Padma Bhushan, one of the highest civilian honors awarded by the Government of India.

Tata Communications bags voice outsourcing deal from BT

Internet and telecom major Tata Communications has bagged a voice services outsourcing contract from British Telecom (BT), spread over a five-year period. The financial details of the contract were not disclosed.

Analysts expect the deal to be around $300 million, based on the company's earnings of $1.2 billion for 24 billion minutes of traffic in the previous financial year.

"Under the contract, we will undertake all BT's voice applications across the world, except for a few markets in Europe. Apart from direct dial and termination services, we will also provide routing and switching services for BT," Tata Communications' Senior Vice-President (corporate strategy) Srinivas Addepalli told Business Standard.

"We expect to add another six billion minutes of traffic from the deal," he added.

For the financial year ended March 31, Tata Communications had recorded 24 billion minutes of traffic, accounting for $1.2 billion in revenues.

According to an analyst, who requested anonymity, if the realisations are in the same range of what the company got in the previous financial year, Tata Communications would be earning around $300 million.

Tata Communications will route BT's voice traffic over its global submarine cable and telecom network. On the other hand, Tata Communications will use BT's distribution channel for its international traffic into the UK. BT will also get access to Tata Communications' online management systems.

We will miss him but the company will continue to run as usual: S Gopalakrishnan

Source: BusinessStandard
Nandan Nilekani, the author of the book Imagining India, helped conjure the shape of what is now India's second largest IT services provider, Infosys Technologies, which he co-founded with five other tech professionals, including its current chairman, N R Narayana Murthy, in 1981. Now, even as most IT services firms are trying to emerge out of a crippling global financial crisis, Nilekani is stepping down to take up a bigger cause — heading a government project to provide a unique identity to each of India's citizens. S Gopalakrishnan, the CEO and MD of Infosys and also a co-founder of the company, tells Bibhu Ranjan Mishra what Nilekani's exit means for the company.
Edited excerpts:

'What’s the company’s reaction to Nilekani's departure?
We will definitely miss him. He is the co-founder and had been with the company from the very beginning in various roles. However, as a company we have made the transition of his role. His responsibility will now be taken care by other people. The company will continue to run as usual. Apart from his role as the board member and co-chairman, he had been responsible for managing certain clients and overseas branding activity, especially after he stepped down as the CEO and MD in 2007. Besides, he had been spearheading some key initiatives we have taken up internally in terms of investment for the future. All his executive roles will now transition to other people with immediate effect.

Who will step into his shoes?
This will be decided by the Infosys board.

Nilekani’s role will now be very different...
He is definitely confident of doing this. I have no doubt on his vision and ability to build consensus to execute various projects. He is a kind of person who gets along with people, and I am quite confident that he will manage things quite effectively in his new role.

What will happen to the shares currently held by Nilekani and his family?
Nandan and his family hold about 3.4 per cent stake in the company, and he will continue to hold that.

Will you bid for the national ID project which will now be headed by Nilekani?
It's too early to comment on whether we will bid or not. We don't know how things will be executed over a period of time. But we are currently bidding for various e-governance projects and have also bagged a few. We will continue to work in the e-governance sector.

Don’t you think that your bidding for the project and ultimate selection (if it happens) will raise doubts about the transparency of the bidding process?
I don't think he (Nilekani) being the chairperson of the Unique Identification Authority of India (UIDAI) will affect the transparency of the bidding process in any way. He is a person of high dignity and integrity. He is being seen as a business leader and a technocrat. I don't think his past association with Infosys will raise any kind of doubt about his honesty and integrity and the transparency of the project.

Will you approach Nilekani for his guidance whenever the company needs it in future?

As a friend, I am sure he is always available to us. But between Infosys and him, he is like any other person outside of Infosys.

Birlasoft among 10 best outsourcing service providers in Australia, New Zealand

Birlasoft has been named among the top 10 best outsourcing service providers in Australia and New Zealand region, by the International Association of Outsourcing Professionals (IAOP), in their list 2009 Global Outsourcing 100.

Birlasoft has been chosen by an independent panel of industry-recognized experts from business and academic institutions. Birlasoft's selection is based on a set of measurable parameters like excellence in service delivery, customer experience, technical competencies, management capabilities and growth.
, ,

IT majors vie for slice of UBS' offshoring contract

Switzerland-based banking and wealth management firm UBS is considering outsourcing about 5,000 jobs over the next two years, according to people familiar with its plans. This signifies an opportunity to win new businesses for Indian IT vendors such as Wipro and Infosys Technologies that already work with the Swiss bank.

UBS recently appointed consulting firm McKinsey to advise it on the outsourcing process. The decision to outsource thousands of jobs is in line with the ailing bank's cost-cutting strategy. UBS chief executive Oswald Grubel has already announced 7,500 job cuts across the firm till 2010.

The Swiss bank has accumulated more than $53 billion in writedowns in the global financial crisis and had to receive financial aid from the Swiss government. The bank is an important client for both Wipro and Infosys. While Wipro, India's third-largest software-services firm by revenues, gets over $50 million in annual revenues from UBS, second-ranked Infosys derives about $40-50 million. Apart from these firms, other vendors for UBS include TCS, Polaris, Cognizant and Headstrong.

Perot Systems expands engineering services, opens office in Hyderabad

Perot Systems Corporation, a global provider of Information Technology services today opened its office in the city for the expansion of its engineering-services capabilities.

The new facility marks the company's sixth major office in India and is part of Perot Systems' global delivery network, which links IT services and business-process specialists in the United States, Asia Pacific, EMEA (Europe, Middle East and Africa) and Latin America.

"The Hyderabad-based team delivers a variety of engineering services including heavy equipment design and analysis as well as engineering change management and manufacturing support," Anura Jain, President, Perot Systems told mediapersons here.

"As with our engineering-services delivery centers in the US, the Hyderabad office will use benchmark methodologies that would help our clients bring new products to market more quickly through accelerated product-development cycles", he said.

The Hyderabad facility is deployed in a newly refurbished space in the Silicon Towers at Hi-Tech City. The office can accommodate up to over 250 associates. Set up in just two months from planning to execution, the facility provides a state-of-the-art working environment that is client-friendly and secure.

"Our Hyderabad facility can support clients anywhere in the world, and it also will enhance our business lopment activities with India-based companies," Jain said.

He said that revenue for 2008 was reported at $2.8 billion. The company has more than 23,000 associates located in the Americas, Europe, Middle East and Asia Pacific, he added.

Microsoft still interested in Yahoo deal

Microsoft, the world’s largest software group, is still open to a partnership with search engine giant Yahoo, chief executive Steve Ballmer (in photo) said on late on Wednesday. “We remain open to a partnership with Yahoo,” Ballmer told a seminar at the Cannes Lion 2009 advertising festival. Asked if a deal could be sealed in the next year, he said: “Who knows?” Ballmer did not give further details.

Microsoft offered to pay up to $47.5 billion for Yahoo early last year, but was rebuffed by Yahoo’s former leadership. There has been talk of a partnership between Microsoft and Yahoo in recent months, but no deal has emerged. Microsoft is also trying to challenge Google with its own new search engine called Bing.

Ballmer also gave a cautious view over the prospects for the world economy, which has been hit by the financial crisis that arose from bank losses on home loans and complex debt instruments. “I don’t think we’re in a recession,” said Ballmer.
“I don’t assume there is a recovery. I think we reset to a lower level and the world economy will grow again from this reset level.”

Ballmer said he was not sure if a full recovery would occur in one year or in two years from now. Asked whether he was worried about a pending European Union antitrust ruling about bundling browsers with operating systems, Ballmer replied: “We comply with EU law.”

Micromax plans Rs 50cr design centre in Beijing

Gurgaon-based mobile handset maker Micromax is planning to set up a design centre in Beijing soon with an investment Rs 50 crore. The company, as of now, has outsourced its manufacturing of mobile phones in China, while research and development (R&D) is done out of the centre in Gurgaon. “We will initially employ 70-80 people in the Beijing centre. This centre will reduce the development time of mobile phones and help us deliver the handsets in less time,” Micromax’s business director Vikas Jain told to media.

The company employs 40 people in its R&D centre in Gurgaon. He said the company is also contemplating manufacturing of mobile phones in its facility in Baddi, Himachal Pradesh. It already has about 18 mobile handsets in its portfolio and plans to launch two models every month in the near future. The company has introduced mobile phones in all segments — from high-end to basic handsets, priced in the range of Rs 1,750-Rs 16,000. Micromax claims to sell 500,000 mobile phones every month in tier-II and tier-III cities. Jain said the company would focus in metros this year and invest Rs 50 crore in advertising campaigns.

China blocks Google, accuses it of spreading porn

China's government accused Google Inc. on Thursday of spreading pornography after Chinese Internet users were temporarily unable to gain access to the U.S. search giant's main Web site or China-based service.

"We have found that the English version of google.com has spread lots of pornographic, lewd and vulgar content, which is in serious violation of Chinese laws and regulations," said foreign ministry spokesman Qin Gang. He said authorities "summoned representatives of Google.com in China and urged them to remove the content immediately."

Qin, speaking at a regular briefing, did not respond to questions about whether China's government was blocking Web users from seeing Google's site. However, he said he hoped the problem can be "resolved immediately." Google said Thursday it was investigating the reason for the outage, which began late Wednesday.

Chinese users were blocked from seeing Google's US site, its China-based site google.cn and its Gmail e-mail service. A Chinese watchdog agency accused Google last week of providing links to vulgar and obscene sites.

Google, based in Mountainview, Calif., said it would do more to stop users in China from accessing pornography. "I would like to stress that Google.com, as an Internet enterprise providing services in China, should earnestly abide by all Chinese laws," Qin said.

"All the punitive measures adopted by the relevant authorities are conducted strictly according to law." The Chinese agency that oversees the Internet, the ministry of industry and information technology, did not immediately respond to requests for comment. China has the world's largest population of Internet users at more than 298 million.

The communist government has the world's most extensive web monitoring and filtering system, and it regularly blocks access to foreign websites. Authorities launched a crackdown this year that led to the closing of more than 1,900 porn-related websites. Google has struggled to expand in China, where it says it has about 30% of the search market. The company launched Google.cn with a Chinese partner after seeing its market share erode as government filters slowed access to its US service.

Mohandas Pai likely to anchor brand Infosys

In the iconic status that the duo of NR Narayana Murthy and Nandan M Nilekani enjoyed, Mr Murthy was the visionary and Mr Nilekani, the management man with great people skills.

Around three decades ago, both Mr Murthy and Mr Nilekani, along with four others, founded Infosys, and later played an active role in establishing it as a credible and ethical brand globally.

Now with Mr Nilekani stepping down from the Infosys board, this role will have to be filled by one of the existing members. Mr Nilekani’s resignation also leaves room for the company to induct a new face on the board from within the second generation of leaders it is grooming.

Mr Nilekani was also actively involved with Infosys’ M&A strategy. In fact, he played an instrumental role in identifying Axon as a potential acquisition target last year.

“He really pushed for Axon, but things did not go the way Infosys had predicted. Mr Nilekani has been involved with several M&A discussions since then,” said a person familiar with Infosys’ M&A strategy. He requested anonymity because he is not authorised to share any details about Infosys’ acquisition strategy.

The natural successor to the role of promoting and evangelising brand Infosys could fall on the company’s former CFO and now a board member, Mohandas Pai. Not only has Mr Pai been with Infosys long enough to be its brand ambassador, he is also a wellknown public face of the firm. He has been associated with many firsts at Infosys , including its landmark ADR, making Infosys the first Indian firm to list on an American stock exchange.

"He’s (Pai) never handled business delivery but he’s eloquent and perhaps most likely choice to take on the role of the brand ambassador. The Infosys brand is big-not only in India, but globally," says R Suresh, MD, Stanton Chase India.

Nilekani's resignation from the Infosys board-the first by a founderpromoter-CEO-also signals a larger, more significant development which analysts, peers and even clients will be keenly watching out for. "Whoever comes on board will be the likely successor to the CEO position," says Alok Shende, principal analyst, Ascentius Consulting. Although it could be a few years away, industry experts are placing their bets on one of the four-B G Srinivas, Ashok Vemuri, Subhash Dhar or Chandra Sekhar Kakal. The four are among the second generation of leaders that Infosys is grooming in its tradition of building leaders, who can seamlessly take over from where his predecessor has left off.

One of the strong contenders for a board position could also be Amitabh Chaudhry, CEO of Infosys BPO, according to industry observers . Now, a fully-owned subsidiary , BPO has become an important growth area for Infosys.


Why Mohandas Pai?

Mohandas Pai, former CFO and now a board member, has been with Infosys long enough to be its brand ambassador. He is also a well-known public face of the firm. He has been associated with many firsts at Infosys, including its landmark ADR.

What's so special about new board member?

Whoever comes on board will be the likely successor to the CEO position

And the candidates are...

Industry experts are placing their bets on: B G Srinivas, Ashok Vemuri, Subhash Dhar, Chandra Sekhar Kakal and Amitabh Chaudhry. They are among the secondgeneration of leaders that Infosys is grooming in its tradition of building leaders, who can seamlessly take over from where his predecessor has left off.

Nilekani moves from Infosys to government

Nilekani resigns from Infosys to take up new assignment

Nandan NiIekani has moved on from Infosys Technologies, a company he co-founded with N R Narayana Murthy and others in 1981. He has accepted the invitation of prime minister Manmohan Singh to take charge as chairperson of the unique identification authority of India. He will have the rank of a cabinet minister.

Infosys’ board of directors on Thursday accepted Nilekani’s resignation, effective from July 9. He holds the position of co-chairman in the company. The new authority will implement a scheme to assign a unique identification number to every Indian. No official word is available on the cost of the project. Though various figures are cited by many, Nilekani told a television news channel that he himself had no idea yet of the cost.

In an e-mail to Infosys employees, Nilekani said, “I have decided to accept the PM’s invitation, as this will help me to truly make a difference to India.”

Nilekani has been a director on the company’s board since its inception. Between March 2002 and June 2007, he was CEO and MD. Thereafter he was re-designated as co-chairman. Narayana Murthy, chairman and chief mentor of Infosys, said, “We are glad that an extraordinary individual like Nandan has got an opportunity to add value to India through this position. As a company that has always put the interest of society ahead of itself, Infosys will accept his absence with a sense of duty to a larger cause, but with deep sadness at the departure of one of her most illustrious sons.”

His colleague and board member, T V Mohandas Pai, said it was a “huge loss” to Infosys. “But I’m sure we have the management bandwidth to cover for this loss. There are people who can step up. At this point the board has not decided on Nilekani’s replacement. He’s 53 years old now, and I can’t comment on whether he’ll come back to our fold later, after this government runs its course,” Pai told FC.

Infosys officials ruled out a conflict of interest should the IT giant bid for contracts of the unique identification project, which be technology intensive and under a man who has served the company for so long. Chief executive officer S Gopalakrishnan said it was too early to say whether Infosys would bid for such contracts. “We do not know how this will be implemented or who will participate. Infosys will continue to bid for government projects. There are mechanisms so that the integrity of the process can be maintained,” he told FC.

Chief financial officer V Balakrishnan said Infosys could bid for contracts of the project, even with Nilekani heading it. “We could definitely bid as there are mechanisms in place to counter any conflict of interest,” he told FC. Nandan Nilekani holds 1.46 per cent stake Infosys, and his wife Rohini has 1.41 per cent. Their children, Jahnavi and Nihar, together hold 0.58 per cent. That’s only next to the Murthy family which holds 5 per cent stake.

Nasscom president Som Mittal welcomed Nilekeni’s in the new role. “It is welcome news since this is a significant and complex infrastructure project. A person like Nandan can help bring in lot of new business practices and transform the process. I think the appointment is to do with leadership, and obviously his technical background helps.”

Nilekani was born in Uttara Kannada district of Karnataka. He was a product of IIT Mumbai (1973 batch) and joined Patni Computer Systems in 1978. It was at Patni that Nilekani met Narayana Murthy. Today he has an estimated net worth of $1.5 billion. In 2004, Nilekani was awarded the Padma Bhushan. Earlier this year, his book, Imagining India, was released.

Google goes offline in China

Internet users in China were unable to access search giant Google Inc's main website or its Chinese service, and the company said that it was investigating.

The outage came after the China Internet Illegal Information Reporting Center last week accused Google of providing links to vulgar and obscene sites.

Google, based in Mountainview, California, said it would do more to stop users in China from accessing pornography. The outage began late Wednesday and affected Google's main site, its Gmail.com email service and its China-based site, Google.cn. On Thursday, all three were accessible from a computer in Beijing, but users in two other cities said they could not open Google's main site or Gmail.

"We are investigating the matter and hope the service will be restored soon," Google spokesman John Pinette in Hong Kong said.

The Chinese agency that oversees the Internet, the Ministry of Industry and Information Technology, did not immediately respond to requests for comment.

China has the world's largest population of Internet users at more than 298 million. The communist government has the world's most extensive Web monitoring and filtering system, and it regularly blocks access to foreign Web sites.

While the government claims the main targets are pornography, online gambling, and other sites deemed harmful to society, critics say that often acts as cover for detecting and blocking sensitive political content.

Authorities launched a crackdown this year that led to the closing of more than 1,900 porn-related Web sites. Google has struggled to expand in China, where it says it has about 30 per cent of the search market.
The company launched Google.cn with a Chinese partner after seeing its market share erode as government filters slowed access to its US service.

Companies Expect Job Cuts But Not In IT: Survey

Source: eWeek
Nine out ten companies say they have no plans to cut back on their IT headcount despite making redundancies in other areas.

Tech staff may be insulated from further job cuts resulting from the recession according to the latest research from the government backed skills councils e-skills UK.

The survey, released late last week revealed that while some companies are expecting to continue laying off staff in the coming months, few plan to include the IT department in proposed cuts, the organisation claims. "Almost one quarter of firms anticipated a decrease in their overall headcount over the coming year, though around nine out of ten firms forecast that the number of IT/Telecoms staff employed would remain unchanged," the report stated.

But despite declaring that they would be unlikely to cut IT jobs, some firms admitted that bonuses aren't on the cards for the foreseeable future, and hiring more IT staff would similarly be curtailed . "One fifth of companies anticipated a decrease in bonuses/other benefits for IT/Telecoms staff, while a similar number expected the budget for recruitment/ salaries to diminish over the year," the report said.

Some businesses are obviously continuing to hire and replace staff but for those firms there are still issues when it comes to filling specific roles. "Around one in six IT/Telecoms recruiters were experiencing difficulties recruiting staff with the right skills, qualifications or experience, with the business skills of applicants most often thought to be below the level needed," the report said.

But while times might be tight some IT professionals are still valued highly. According to the third annual Information Security Solutions Salary Survey 2009, published in April, the majority of information security professionals’ salaries have increased despite the pressure of recession.

Over half (56 per cent) of more than 600 contract and permanent survey respondents had received a pay increase in the last 12 months. This was in contrast to 38 per cent, who said their salary had remained the same, the survey stated.

Thursday, June 25, 2009

Citigroup to raise base pay by 50%

Citigroup intends to raise workers’ base salaries by as much as 50 per cent this year to offset smaller annual bonuses, according to people with direct knowledge of the plan.

The shift means that most Citigroup employees would make as much money as they did in 2008, although some might earn more and others less. The company also plans to award millions of new stock options to employees in an effort to retain workers and neutralise a precipitous drop in the value of their stock holdings.

Like Citigroup, US financial companies such as Bank of America and Morgan Stanley are raising employees’ base salaries to try to shift attention away from bonuses and to curb excessive risk-taking. So are banks like UBS and other European competitors.
The Citigroup proposals, discussed internally this week, present a crucial test for president Barack Obama’s administration, which has vowed to rein in runaway compensation at companies that have received large, taxpayer-financed bailouts.

Citigroup has gotten two rescues from Washington. Soon, the US government will assume a 34 per cent stake in the company, whose share price has plunged nearly 84 per cent in the last year.

Despite Washington’s new role at Citigroup and public anger over big paydays on Wall Street, administration officials have little power to prevent the company and others in the industry from raising salaries for rank-and-file employees.
Kenneth R Feinberg, the administration’s new “pay czar,” has the authority to set compensation for only the top 100 employees at troubled companies. The rest — which at Citigroup means hundreds of thousands of people — can be paid as executives see fit, provided any increase does not rank them among the 100 most highly paid workers.

Outsize pay on Wall Street, particularly the industry’s bonus culture, is widely seen as having encouraged the risk-taking that led to the financial crisis. But industrywide, total compensation is expected to rise 20 to 30 per cent this year, approximately to the levels of 2005, according to Johnson Associates, a compensation consulting firm. Total industry pay would still be below the record levels of 2007, but only a bit.

“You can say it is outrageous,” said Alan Johnson, the president of the consulting firm. “But maybe it’s a little like the canary in the mine, and you say that things are getting better.”

Indeed, despite the simmering anger over Wall Street pay, some of the 10 big banks that repaid their government aid this month — a big step toward disentangling themselves from the government — are gearing up to pay outsize bonuses. For many, profits are up, despite the troubled economy. On Monday, Goldman Sachs, which returned $10 billion of bailout funds, denied reports that it planned to pay out the highest bonuses in its 140-year history.

Citigroup executives are so eager to keep employees from fleeing that in some cases they are offering them guaranteed pay contracts. Managers began notifying bank employees of the proposed changes this week. They could take effect shortly.

For some Citigroup investment bankers and traders, the changes could mean salary increases of as much as 50 per cent, depending on their position. Legal and risk management employees, as well as those in the credit card and consumer banking units, whose pay is typically skewed toward salary, rather than bonuses, are expected to receive smaller increases.

Stephen Cohen, a Citigroup spokesman, said that any changes would be intended to adjust the balance between salaries, which are fixed, and bonuses, which vary from year to year.
Source: mydigitalfc.com

8,500 jobs may be axed if work not found: Satyam

Satyam Computer Services today said 8,500 idled employees might be fired in six months, unless business picked up as the Indian software provider reorganised.

“There is a possibility” the employees who have been furloughed on reduced pay because of a lack of work will be fired, newly-appointed Executive Vice-Chairman Vineet Nayyar said in an interview. The cuts would represent 18 per cent of the workforce, based on the number of employees Satyam said it had in April.

The company will release a reorganisation plan tomorrow to cut costs and help retain customers after a stock collapse prompted by founder B Ramalinga Raju’s admission in January that he overstated assets.

The possibility of Satyam’s business improving enough in six months so that all the idled employees can be deployed is “very negligible,” Srivathsan Ramachandran, a Chennai-based analyst at Spark Capital Advisors, said. Satyam, which said it had about 48,000 employees at the time Tech Mahindra agreed to buy it, has 8,500 employees on a “virtual bench” because of a lack of orders, Chief Executive Officer Chander Prakash Gurnani had said yesterday.

Cognizant launches portal for West Asia

IT services provider Cognizant has developed West Asia’s first online health insurance portal for National Health Insurance company, Daman, the region’s leading health insurance company. The new portal will provide Daman’s 18 lakh customers the convenience of accessing their insurance policies, records, and claims and conducting their health insurance transactions online on a 24X7 basis. The initiative will provide its customers an integrated multi-channel experience and increase efficiencies of the firm to augmenting its bottom line.

“The portal will enable our members to reach us much faster by enabling them to perform their health insurance transactions online, around the clock, from anywhere around the world,” said Michael Bitzer, CEO of Daman. According to R Chandrasekaran, president and managing director (Global Delivery) of Cognizant, the new initiative will set new standards in customer experience in the region’s healthcare industry.

General Motors offers retirement incentives to cut 4,000 more white-collar jobs by year's end

About 4,000 more salaried workers at General Motors Corp. will lose their jobs by the end of the year as the automaker continues to downsize. The company notified its more than 27,000 U.S. white-collar workers by e-mail Tuesday that that it will offer standard severance packages, and employees near retirement age will have the opportunity to retire early, spokesman Tom Wilkinson said.

Some involuntary cuts will be necessary, Wilkinson said, as GM tries to shrink its U.S. salaried work force to around 23,500 by year's end.

US' SunGard to expand operations in India

Sungard, one of the world’s leading providers of financial services and software, is expanding its India operations. The Pennsylvania, US-based company, which has been operating a captive development centre in India since 1993, has now appointed an MD for sales in India to bring in business from the fast-growing sector.

SunGard, which makes products for the financial services, education and public sector industries, was the target of the second-biggest leveraged buyout in history in 2005. It is now owned by seven private equity investors.

Atul Sareen, who has been named managing director, India sales, SunGard Financial Systems, is a former vice-president for IBM Software in India. Mr Sareen, who joined SunGard three months ago, has also worked with SAP, one of the largest vendors of business application software. SAP is SunGard’s rival in some areas and a partner in others.

“So far, the US and Europe have been our biggest markets, though in the past two years we have started scaling up in Asia Pacific,” said Mr Sareen. About 74% of SunGard’s revenues come from the Americas and 24% from Europe. Asia Pacific accounted for only 2% of its $5.6 billion revenues in 2008.

Although it is now a privately owned firm, the company discloses its financials because it has US debt, said Andrew Bateman, COO, Asia Pacific. Despite the pressure on PE players, none of its investors have plans to sell their holdings in the firm, Mr Bateman added. Large PE investors, such as Silverlake, KKR and Blackstone, have stake in SunGard.

30 HUL managers face layoff or redeployment

Hindustan Unilever Ltd (HUL) has shed or reassigned 30 managers as part of a plan to link revenue and profits to headcount, which, a retired top executive of the company said was “unprecedented” in the history of India’s largest consumer goods company.

Two people familiar with the matter told that some of these staff — including managers with 5 to 10 years of experience in the company — have been redeployed to functions such as research and development, while the rest have been given a severance package and laid off.
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Controversy: American tech grads are unemployable: HCL CEO

HCL technologies' Chief Executive Vineet Nayar recently said that American tech graduates are basically 'unemployable', according to an InformationWeek report. He says that he views American tech grads as inferior to those from India, China and Brazil. American tech students only enter the field to get rich or to dream up the next big thing while students from India and China are willing to handle even the boring part of the industry, ITIL and Six Sigma.

Several months ago few western CEO had claimed that even though India produces second largest number of engineers in the world, more than half of them are unemployable. They also say that Indian graduates are smart, driven and they work for a pittance compared to their Western counterparts but lack critical thinking and creativity and function like robots.

Nayar has responded back to such claims as he feels that Americans are too costly to train as compared to Indian graduates who are highly trained in real life applications because they attend vocational courses and have hands on experience. HCL, however, has recently announced that it plans to open a delivery centre in North Carolina with an investment of $3.2 million and will hire over 500 employees over the next five years under a U.S. Job Development Investment Grant.

These remarks from Nayar have already created quite a few controversies. InformationWeek's Robert Preston wrote: "Imagine if the CEO of a U.S.-based tech company marched into Mumbai seeking a bigger share of the country's multibillion dollar market and declared the locals to be unemployable and un-trainable. A culture of innovation isn't inconsistent with one that values attention to detail." Few websites have taken this to extreme. A protectionist web site JobDestruction.com has sent email newsletter which says, "HCL hires Indians almost exclusively, so it's safe to assume that Nayar's disparaging comments don't just apply to our young college graduates. He thinks ALL Americans are unemployable."

Indian IT boom to provide job opportunities abroad

Source: siliconindia
So far American firms have been picking up talent from India by offering good salary packages. But things might soon change as Indian companies are now scouting global market to hire employee. One such company is Infosys which is spending $100 million over the next year to train 25,000 overseas workers and college graduates, targeting in particular those from Massachusetts Institute of Technology and Harvard University.

Many Indian companies are opening offshore offices and recruiting the local staff. Also, labor shortage in India is forcing companies to look elsewhere. Indian companies have come a long way from just being back office outsourcing firms. Now they process into areas such as design, research and development, and sophisticated business applications that require highly skilled workers.

For many years, U.S. companies have hired people from India but now caps on number of visas for foreign professionals have caused delays in processing applications and has forced Indian companies to develop another strategy for its offshore branches. "They said, 'Let us train people in the U.S. or India and make them an extension of our offshore team, in the U.S.' So, Americans are now becoming the offshore component for foreign firms," says Gary David, an associate professor of sociology at Bentley College, Boston.

Right now, more than 10,000 American expatriates work in India for Indian information technology consulting and other outsourcing firms, a number that is expected to grow, says John McCarthy, vice-president of Asia Pacific research at Forrester Research in Cambridge, Massachusetts. He estimates that U.S. employers will move 3.4 million jobs and $136 billion in wages overseas by 2017.

U.S. firms seek to cut costs while Indian firms Infosys and TCS are scouting for highly skilled talent outside India, and they say they will pay the local going rate. "We're hoping to bring a different kind of diversity to our workplace. For us, diversity is a way to encourage innovation," said Bikramjit Maitra, Head of Human Resources at Infosys. Since India has become a centre for computer science, firms can teach new employees in India, where there is state-of-the-art training, says Surya Kant, President of TCS America.

Analysts from Gartner, based in Connecticut, say that outsourcing of IT jobs from the U.S. and Europe to developing countries will increase to 30 percent by 2015, up from less than 5 percent currently.

Genpact eyes expansion in India

Business process outsourcing company Genpact Ltd expects its healthcare services business to grow at "a good pace," and is looking to expand the segment in the United States, India and the Europe, its chief executive said.

"This is one (segment) that can grow at very large double digits mainly because it is a relatively untapped market," Genpact Chief Executive Pramod Bhasin said in an interview. Genpact, which provides services in asset management, hospital administration, supply chain logistics and finance, gets about 7 per cent to 8 per cent of its revenue from healthcare outsourcing. The company, which draws majority of its revenue from banking, financial services and insurance, and manufacturing sectors, reported revenue of $1 billion in 2008.

TCS passport project gets delayed

Promising a passport within three days, it peddled a dream to Indians crowding understaffed and overburdened regional passport centres. But the Passport Seva Project -- one of the government's flagship e-governance programmes -- is running behind schedule.

In October 2008, the Ministry of External Affairs (MEA) signed the agreement with Tata Consultancy Services (TCS) to implement the project, estimated to be worth Rs.1 billion. Foreign Secretary Shivshankar Menon had then said the pilot project -- with centres in Chandigarh and Bangalore -- will become functional in June 2009, with the rest of the country to be serviced by 77 stations in 2010.

But it seems increasingly unlikely that the schedule will be adhered to. A major reason for the delay is the inordinate time required to draft the software requirement specification (SRS) document, which was completed only recently.

"We didn't realise how much time it would take to draw up this document," a senior official closely involved in the process said.

The SRS, which details how the software programme will behave in diverse circumstances, had taken a lot of brainstorming sessions between MEA and TCS engineers. The final document comes to about 400 pages.

Also, the state-run National Informatics Centre (NIC), which had so far managed the back-end of the passport system, handed over the data for 80 million records to MEA earlier this month.

The data will be kept in a specially constructed data centre as it awaits 'migration' to the new software programme developed by TCS. But there's more to be done before the pilot project gets off the ground.

The ministry still has to sign a non-disclosure agreement with TCS, as the latter will have access to information of millions of applicants. Incidentally, MEA has insisted that all "sensitive activities" will be carried out only by government agencies.

While the main data centre is ready, the recovery centre is taking a lot of time to be set up. "It was assessed that it will be too risky to start the project without a back-up data centre," he said.

Last week the ministry signed a deal with the state-run Software Technology Parks of India (STPI) to build the recovery data centre in Chennai. The STPI has apparently said while the physical infrastructure would be in place by mid-July, the networking to different stations may take longer.

Confusion also persists on whether the NIC's current PISON (passport information service system on the net) will continue in parallel to the proposed TCS software - and, if so, their mode of compatibility.

The dilemma has arisen as Indian missions abroad -- which also issue passports and are linked through the NIC programme -- are not part of the Passport Seva Project.

This is not the first time the schedule has been changed. Earlier, before the formal signing in October, there had been assurances that the pilot project would start by March. But the formal announcement listed June as the deadline for the pilot project.

The agreement has a strict provision for levying penalty on TCS, but the ministry has decided to not yet invoke that clause. When TCS was contacted about the status of the project, its officials directed all queries to the ministry.

"It is a very complicated process. The project is ongoing and will be started very soon," A. Manickam, joint secretary, consular, passport and visa, MEA, told IANS.

70-80 senior leaders at Satyam under lens

Ram Mynampati resigns.
Mahindra Satyam is understood to have asked its middle-level leadership to shape up. The roles of these officials, according to a new plan, which will be effective from July 1, will be “trimmed” to reduce duplication, rendering the work profile of around 70-80 senior leaders redundant. Each of these employees have about six to seven years’ experience at Satyam, a company official, confirmed on condition of anonymity.

“The new owner has lost no time in communicating that it’s performance which will matter,” the official said. Those employees who are not pliable enough to meld in these new roles may be asked to leave the company, he said, adding that integration was on the cards in verticals like telecom, which is the core strength of Tech Mahindra.

He said these managers would be measured by the profits or losses their units made. "Several organisational layers would be removed. In some departments, there are double and sometimes even three layers of accountability, which is a waste of time and resources," the official added.

Tech Mahindra is also exploring the possibility of taking some senior staff from Mahindra Satyam into their company.

Meanwhile, Ram Mynampati — former Satyam executive director — is understood to have quit the company. A senior executive of Mahindra Satyam, however, said that Mynampati has “indicated his intention to resign” but he was not aware whether he had put in his papers.

Mynampati was the interim chief executive officer of Satyam for a brief period after Ramalinga Raju had confessed to the massive financial fraud in the Hyderabad-based IT company. A day after the shocking disclosure of Raju on January 8, the then 10 top leaders of Satyam, including Mynampati, issued a joint statement pledging to remain in the company and work jointly to steer the organisation. Shortly thereafter, Mynampati left for the US where he has remained till now.

'Depressed' over losing job, techie from Maharashtra ends life

Allegedly depressed over losing his job, a software engineer "ended his life" by hanging himself at Kachiguda here, police said today. Sachin B Khandewar (29), a native of Solapur in Maharashtra hanged himself, by using a nylon rope, to the ceiling fan in his room between 11.15 pm and 12.00 pm last night, Kachiguda police said.

Sachin's relatives came to know about the incident at about 6.30 am today after one of his aunts noticed his body hanging in the room, an investigation officer said.

Sachin was residing with his aunt for the past three years at Rajendranagar Colony at Kachiguda area and was working as a software engineer at a local software firm in Somajiguda here, but lost his job about six-months ago, he said.

A suicide note, purportedly written by Sachin, was found near his body. Quoting the note, the police officer stated, "He was under depression for the past 5-6 months after losing his job."

"No one is responsible for my death. I am fed up with this useless life and world," the note said.

An autopsy was being conducted on Sachin's body and further investigations were on.

Satyam: Second round of top-level appointments on Thursday

Mahindra Satyam will see another round of reshuffling of top executives tomorrow that will see outgoing CEO AS Murthy getting a new designation and US-based head of commercial division Ram Mynampati being replaced.

Mynampati, who was the President of the Commercial and Healthcare Divisions, has been replaced by Keshav Panda, sources close to the development said. Panda, who was the head of the Europe business would be replaced by someone from within the Tech Mahindra Group.

Indians on business trips to UK should get visas on short notic

Indians on business trips to Britain should be provided visas on short notice to allow them to explore commercial opportunities in the country, Lord Navnit Dholakia, Deputy leader of the Liberal Democrats in the House of Lords said today.
Participating in a debate on 'British Opportunity in India and Indian Investments in the United Kingdom', Dholakia said "Bilateral trade is impacted by our own visa regime."

Drawing attention towards the difficulties faced by Indian businessmen in obtaining visa, Dholakia said "We should make sure that business visitors and senior providers are facilitated to travel to the UK to explore business opportunities and business contracts."

"Would not the Minister accept that timelines are short in the business world?" he asked. He cited the example of IT industry and said "it is particularly impacted by issues such as delivery of service which is dependent on movement of professionals at short notice."

Wednesday, June 24, 2009


Temporary US visa holders in Washington to get subsidised tuition

Under the new House Bill 1487, which is to be introduced on 1 July, foreigners working in the US state of Washington on certain temporary US visas such as H-1B visas will receive the same subsidized tuition fee charges as American citizens. Low-cost tuition fees will also apply to the workers' spouses and dependants.

The bill has been nicknamed the ‘Microsoft Subsidy Bill’ and has caused some controversy, but has been passed through the House and the Senate as a good way to help large international firms in Washington attract foreign talent to come and work in the US. Currently, 13 other states offer some subsidised tuition for foreign workers and the Washington bill is intended to help the state compete with these.

Under the plans, an immigrant state resident will pay $7,677 for a years tuition at the University of Washington, which compares to the £24,352 that was payable before the subsidy scheme.

Lydia Tamez, Microsoft’s director of global migration, says the new bill allows spouses, who often cannot work under their US marriage visas, to study while they are living in the US.

She explains, "these are people who are here lawfully, and are going to be here for a long period of time. It makes it affordable for workers who are your neighbors, pay taxes, buy homes and whose kids hang around with your kids to possibly earn a second degree at night."

Oracle revenue, profit fall

Oracle reported a drop in quarterly sales and profit today, while still beating Wall Street expectations. A decline in software purchases was offset by the company's huge base of existing customers who continued to pay for maintenance and upgrades. The Redwood City software giant reported net income of $1.9 billion for the quarter that ended May 31, down 7 percent from the same period a year ago, on revenue of $6.9 billion, which was down 5 percent from a year ago.

Those figures were better than predicted by Wall Street analysts and the company's own forecast, issued three months ago as the recession was hitting Silicon Valley hard. Oracle executives were cautious Tuesday about projecting an upturn, but said they were encouraged by a growing pipeline of deals.

MTV Networks lays off 50 staffers

MTV Networks has trimmed the staff of its MTV Music Group and gay-oriented Logo division. About 50 employees were laid off Tuesday, representing 1 percent of MTV Networks' workforce. "The current economic climate dictates we continue to look for more efficiencies in how we run our businesses," MTV said in a statement.

The latest round of layoffs follows the cut of 850 jobs in December when parent company MTV Networks eliminated 7 percent of its work force, with MTV Networks among the most affected.

Infosys CEO on how to battle recession

Source: indiatimes.com
There is lower tolerance for poor performance in a downturn, says Kris Gopalakrishnan, chief executive officer & managing director, Infosys Technologies. Here's his account on how to fight recession.

How is dealing with recessionary conditions different when you’re in a senior leadership position than when you’re actually leading as CEO?
The CEO has to take bottom line responsibility and has to be accountable to all stakeholders. A senior leader is responsible to only one department or business unit. In that sense, CEOs are different.

How was the IT sector affected last time -- the depression of 2001-03? And now?
The dot-com bubble was restricted to a few sectors. It did not impact financial services -- the backbone of any economy. The crisis is global and is impacting all industries and countries. The responses from governments around world have also been unprecedented taking into account the scale of the problem.

What is the mBoldost challenging part about being a recessionary CEO?
In a recession, growth is absent; sometimes, the business may even be shrinking. In this scenario, managing costs in order to protect margins become the immediate priority. Medium term, you have to continue to invest in the business selectively such that the business can emerge from the downturn stronger than competition. This is challenging. Even in good times, a CEO must be able to get to the details if needed. During a recession, this may increase due to the requirement for faster action.

What are some of the most difficult decisions you’ve had to take recently?
Clients are expecting greater flexibility in pricing and margins may get affected because of that. Utilisation levels are lower because of lower volumes of work. There is lower tolerance for poor performance since everyone has to perform better in a downturn.

How do you inspire and motivate the entire organisation at a time like this?
First and foremost, we have to communicate the vision, mission, goals and purpose of our business. We have to make every employee feel that he or she is needed and plays a valuable role in the business. Everyone must feel that they are benefitting intellectually, career-wise and in terms of personal wealth. Employees must feel inspired by the leadership and the values of the company.

Is there a silver lining to the recession cloud?
Downturns allow a company to get ahead of competition if they are able to manage better. In good times, everyone does well; it is during bad times that the good do even better. It also teaches everyone to become more flexible and performance is appreciated better. A recession may fundamentally alter the structure of industries since only the best will survive and emerge stronger. It could change the rules of the game.

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