Mahindra Satyam may axe 5,000 benchers

The axe is haunting Mahindra Satyam staff, months after they were assured that there would not be any layoffs. On Monday afternoon, many Satyam's employees on the Virtual Pool Program (VPP) of the company were sent a formal notice of two months by e-mail.

The mail dated October 19, a copy of which is with The Times of India, reads, "In our earlier communication dated June 11, 2009, you were placed on VPP for a period of six months and accordingly, your Virtual Pool Leave is due to end on December 18, 2009. It is rather unfortunate that due to the continued economic constraints and business outlook, we do not anticipate that we will have the ability to recall many of our valued associates within the VPP period."

On June 11, the company announced the creation of the virtual pool, placing nearly 8,000 associates on the bench. "The surplus employees will be put in the VPP and paid basic salary, PF and medical insurance," Vineet Nayyar, CEO, Tech Mahindra, had said even as he ruled out any retrenchment.

However, with the six-month period of the VPP set to lapse in December, the company has served a two-month notice, as required by the employment contract, reportedly on over 5,000 employees. Sources told that the company did not have enough projects on hand and was not able to recall many associates.

A Mahindra Satyam spokesperson told that the company had absorbed about 1,500 associates from the virtual pool. The spokesperson also denied that the company was "laying off" people, even as the mail speaks of "separation of employment".

"We have given these employees an option of availing outplacement services. We will try to help them to the best of our abilities," he said.