Showing posts with label severance package. Show all posts
Showing posts with label severance package. Show all posts

Friday, May 29, 2009

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Satyam to sweeten layoff terms

A majority of the 10,000 excess staff at Satyam Computer Services are set to be offered 40% of their salary for six months in what can be termed as a severance package being firmed up by the beleaguered IT firm.

The top management of Satyam, in consultation with its new owner Tech Mahindra, has prepared a list of around 10,000 employees, who have not been billed for over six months now. These employees are set to be offered 40% of their existing salary for six months, along-with medical insurance and provident fund. But they may eventually have to leave the firm. Non-billable employees have been short-listed, as they do not bring in any revenues to the IT firm.

Raju had hired more number of employees to inflate revenues and profits of the firm, and the economic downturn has only compounded Satyam’s woes, forcing Tech Mahindra to look at a separation package for the excess staff in the Hyderabad-based outsourcer. Senior industry leader Kiran Karnik, who was chosen by the government to be on the Satyam board and salvage the firm, said unless substantial steps were taken to contain costs, Satyam could go under and risk the jobs of all employees.

The board had suggested a number of options to the new management, including organisation-wide salary cuts, keeping employees on a virtual bench and sending them on a sabbatical. In the last two cases, the company would have to pay only part of the salary to these employees.

Vineet Nayyar, the CEO of Tech Mahindra and now whole time director on Satyam, declared that the company had an excess staff of around 10,000. The employee strength at Satyam is reckoned to be around 42,000. It is likely to drop to 32,000, if the proposed plan to create a “virtual pool” is implemented. Non-billable employees across all levels will be impacted, though entry and middle levels will see more exits.

“We recognise that we have to deal with the situation and are exploring the most humane ways to tackle this issue,” said T Hari, global head marketing, Satyam Computer Services.

The company is talking to a dozen out-placement firms to help people, who are laid off to find new jobs. It is also planning to tie-up with engineering colleges for PG courses and would fund employees, who wish to enrol in these programmes.

A few companies have also written to Satyam to take some employees on board. Employees, who have been identified for layoffs, will also have access to all the training programs offered by Satyam, said Mr Hari. The company plans to have financial counsellors to help out those whose exits are imminent.
Source: TheEconomicTimes

Saturday, May 23, 2009

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Satyam employees may get 9 months severance package with pink slips

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

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

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

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

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

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

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

Saturday, March 28, 2009


IBM's golden handshake to employees

Source: TheEconomicTimes
The severance package that IT giant IBM is expected to give employees selected for a layoff reportedly includes a lump sum severance payment as well as counseling and financial planning services.

According to media reports, the company will cut about 5,000 jobs in the United States. The job cuts will account for over 4 per cent of IBM's US workforce, which totaled around 115,000 at the end of 2008.

According to a report in Computerworld, here’s what the laid off IBM employees are slated to receive:

A lump sum separation payment equal to one week of pay for each fully completed six months of service based on the most recent date of hire, with a minimum of two weeks and a maximum of 26 weeks.

Eligibility for a continued IBM subsidy for medical coverage. The coverage period is three months for less than five years of service; six months for five or more years but less than 25 years of service, and 12 months for 25 or more years of service. Transitional group life insurance follows a similar formula.

Outplacement and career counseling, with reimbursement of up to $2,500 for job-related skills training completed within 12 months of departure date, among other services.

The ability to apply for other jobs within IBM, as well as take jobs overseas, but the pay will be at local rates. The company says overseas work "may not appeal to everyone, but it can be a good fit for IBMers who are interested in broadening their skills by living and working abroad, or for those with a cultural or heritage link to one of the countries where positions are open."

Wednesday, February 25, 2009

Microsoft: Laid-off can keep extra pay after all

Microsoft Corp. admits it screwed up a key part of the plan. First Microsoft realized that an administrative glitch caused it to pay more severance than intended to some laid-off employees. The company's response: It asked the ex-workers for the money back.

But when one of Microsoft's letters seeking repayment surfaced on the Web on Saturday, the situation turned embarrassing. On Monday, the company reversed course and said the laid-off workers could keep the extra payouts.
Lisa Brummel, Microsoft's senior vice president for human resources, said the letters were mailed to 25 of the 1,400 people let go in January. Most of the checks were off by about $4,000 to $5,000, she said.

Brummel said she learned of the letters over the weekend after one appeared on the technology blog TechCrunch. "I decided it didn't quite feel right," she said in an interview. The executive called most of the 25 laid-off employees Monday to personally tell them Microsoft would not seek repayment after all. Redmond, Wash.-based Microsoft also gave about 20 employees too little severance. When the company noticed its mistake, it sent checks and explanations to those people, she said.

Brummel called the glitch a clerical error, and said that at some point in the process of calculating severance packages, communicating with employees and cutting checks, "we had payments misaligned with people's names." (Brummel said she didn't know whether an Excel spreadsheet was at the root of the problem.)

With the recession biting into sales of Microsoft's core Office and Windows software, the company said in January it would let up to 5,000 of its 94,000 employees go, the only mass layoff in its 34-year history. Microsoft remains profitable, however, and has a cash hoard of nearly $21 billion.
Shares of Microsoft sank 79 cents, or 4.4 percent, to close at $17.21.

Tuesday, February 24, 2009


Microsoft Asks Laid-off Workers to Return Overpaid Severance

Microsoft is asking some of the workers it laid off in late January to pay back money they were given in excess of their severance packages. The Redmond-based company is blaming an accounting error and expects repayments within two weeks.

After making 1400 staff redundant, Microsoft reportedly overpaid some of those former employees and underpaid others at the same time. Those who were overpaid were reportedly sent letters requesting for a refund.

Monday, December 15, 2008


Yahoo offers severance package with a soft landing

A pink slip for corporate America's newly laid off typically means a severance package and a "see ya." But when Yahoo issued its layoff notices to 10 percent of its workforce on Wednesday, it came with a twist, according to several sources.

Yahoo's 1,520 pink-slipped employees will remain on the payroll through February 13, retaining the ability to continue vesting any options that may come available through that separation date. Vacation accrual, however, will not apply, noted one source.

By the same token, those laid off employees will be "on call" to answer any questions that those who will be taking up the slack may have, to a certain extent anyway.

For those folks who have not landed a job by February 13--which in this recessionary climate may be many--nor bad-mouthed the company, will be entitled to an additional lump sum payment of two, three, or even four more months of severance, sources say.

And on top of that, an additional one month of severance will be awarded for every five years of service at Yahoo, sources note.