Indian IT outsourcing company Wipro is seeing a few customers cancel contracts and more delaying or downsizing deals as a result of deteriorating global economic conditions, its joint chief executive said.
Girish Paranjpe added that Wipro, India's third-biggest software services exporter, was feeling minimal impact from last week's attacks that killed almost 200 people in Mumbai, and reiterated that the company expects business to improve next year.
Referring to the Mumbai attacks, he told Reuters in an interview on Monday, "I don't see any operational impact of that ..." When asked about cancellations by Wipro's customers -- who include Cicso, Credit Suisse and Nortel -- he said: "Some few, but much more delay, postponement, resizing -- a few cancellations."
Paranjpe said he remained hopeful that business would pick up in the company's first quarter beginning in April next year after a slowing that began about a quarter ago. Customers cannot sustain constrained spending indefinitely, he said.
"About six months you can manage with compression, three to six months you can manage with compression. Beyond that, you have to start thinking longer-term," he said. "I'm still kind of optimistic that we would have gone past the bottom some time in the first fiscal quarter" next year, he added.
Sector leader Tata Consultancy Services and fellow large Indian outsourcer Infosys have recently expressed cautious optimism about the market, but like most peers they face at least short-term uncertainty.
Wednesday, December 3, 2008
Cost cutting, Infosys
Let’s begin by saving $10 per staff: Infosys CEO Kris
IT industry’s all-out efforts to control expenditure in the backdrop of what could be a grievous multi-year economic downturn has seen the tech posterboy Infosys Technologies now asking its employees to cut cost by at least $10 individually.
Detailing the most serious slowdown faced by the three decade-old IT offshoring story, Infy CEO Kris Gopalakrishnan, in an internal mail circulated to all the employees, says: “If each one of us is able to identify a savings of even $10–not just per day or per month–but $10 as a one-time effort from each one of us, that would translate to a saving of close to $1,000,000—which is a substantial amount.”
The $5-billion Infosys, the country’s second-largest software exporter, has over one lakh employees spread across globally. Mr Gopalakrishnan continues: “I urge each one of you as a key stakeholder of the company’s success, to examine your work environment and look at opportunities that will optimise utilisation and control expenditure. What may appear to be an insignificant saving at the ground level, may well add up to substantial savings when aggregated at the regional or global level..”
Mr Gopalakrishnan’s mail, drawing on varied research reports, has projected a longer recession in the global economy that may severely constrain the IT spending of its several clients.
“The recent economic developments across the globe are forcing all organisations, small, medium and large, to re-evaluate priorities and establish fiscally responsible measures that will ensure sustainability over the next 12–18 months.” Infy honcho’s mail said the recession is expected to continue well into 2009 with US and Japan economies shrinking.
Given this backdrop, Infosys has charted out four main objectives: to increase the billability and utilisation of all its employees around the globe; to increase revenues and margins; to identify cost optimisation opportunities, which may include increased leveraging of its lower cost locations for delivery; to improve the control over spend and optimise return on investment.
Recently, Wipro Chairman Azim Premji sent out mail to all its employees talking about controlling expenditure. Many IT companies have already begun rationalising costs by cutting down travel expenditure and with a freeze on hiring.
The internal mail adds, “As we explore and work through the opportunities toward creating sustainability, each of the units is looking to drive optimisation at all levels, and will draw upon you to support the process in a transparent manner, and with minimal disruption to business. A successful outcome will position Infosys well within the client base, and demonstrate our ability to positively respond to the dynamics of this global economy.”
Detailing the most serious slowdown faced by the three decade-old IT offshoring story, Infy CEO Kris Gopalakrishnan, in an internal mail circulated to all the employees, says: “If each one of us is able to identify a savings of even $10–not just per day or per month–but $10 as a one-time effort from each one of us, that would translate to a saving of close to $1,000,000—which is a substantial amount.”
The $5-billion Infosys, the country’s second-largest software exporter, has over one lakh employees spread across globally. Mr Gopalakrishnan continues: “I urge each one of you as a key stakeholder of the company’s success, to examine your work environment and look at opportunities that will optimise utilisation and control expenditure. What may appear to be an insignificant saving at the ground level, may well add up to substantial savings when aggregated at the regional or global level..”
Mr Gopalakrishnan’s mail, drawing on varied research reports, has projected a longer recession in the global economy that may severely constrain the IT spending of its several clients.
“The recent economic developments across the globe are forcing all organisations, small, medium and large, to re-evaluate priorities and establish fiscally responsible measures that will ensure sustainability over the next 12–18 months.” Infy honcho’s mail said the recession is expected to continue well into 2009 with US and Japan economies shrinking.
Given this backdrop, Infosys has charted out four main objectives: to increase the billability and utilisation of all its employees around the globe; to increase revenues and margins; to identify cost optimisation opportunities, which may include increased leveraging of its lower cost locations for delivery; to improve the control over spend and optimise return on investment.
Recently, Wipro Chairman Azim Premji sent out mail to all its employees talking about controlling expenditure. Many IT companies have already begun rationalising costs by cutting down travel expenditure and with a freeze on hiring.
The internal mail adds, “As we explore and work through the opportunities toward creating sustainability, each of the units is looking to drive optimisation at all levels, and will draw upon you to support the process in a transparent manner, and with minimal disruption to business. A successful outcome will position Infosys well within the client base, and demonstrate our ability to positively respond to the dynamics of this global economy.”
Cost cutting, Layoffs in India, Layoffs in USA
After layoffs, Citi now cuts down severance package for staff
NEW YORK: American behemoth Citigroup, which is axing over 75,000 jobs this year to help cut costs and fight financial crisis, is now slashing the severance package, that too for staff having put 10 or more years with the bank. Besides, the Vikram Pandit -led bank has also hinted at further job cuts in the coming days, after already having cut down or announced plans to bring down its workforce to below 3,00,000 employees from more than 3,75,000 at the end of 2007.
In an internal mail to all its employees in the US, Citi's Human Resources Head Paul McKinnon said on Monday that it would eliminate some “supplemental severance payment'' for the employees with 10 or more years of service, with effect from January 15, 2 009. ''... we have continued to review our policies and practices to ensure that they support our overall business objectives and remain competitive with industry standards. As a result, a decision has been made to amend the Citigroup Separation Pay Pl an (SPP) for US employees,'' the mail said.
Earlier last month, Citigroup's India-born CEO Vikram Pandit has said that the bank would bring down its headcount to below 3,00,000-- a plan that entails more than 52,000 job cuts in the current quarter alone. Prior to this announcement, Citi had alread y cut close to 25,000 jobs since the beginning of this year. Citi's headcount stood at 3,52,000 at the end of September quarter.
A few days after the massive layoff announcement, the US government came in to support crisis-ridden Citigroup with a rescue package that entails an overall capital infusion of about 40 billion dollars, alongside a guarantee for troubled assets worth 306 billion dollars with the bank. The rescue package has stripped down bank's dividend as well as executive compensation payments.
In an internal mail to all its employees in the US, Citi's Human Resources Head Paul McKinnon said on Monday that it would eliminate some “supplemental severance payment'' for the employees with 10 or more years of service, with effect from January 15, 2 009. ''... we have continued to review our policies and practices to ensure that they support our overall business objectives and remain competitive with industry standards. As a result, a decision has been made to amend the Citigroup Separation Pay Pl an (SPP) for US employees,'' the mail said.
Earlier last month, Citigroup's India-born CEO Vikram Pandit has said that the bank would bring down its headcount to below 3,00,000-- a plan that entails more than 52,000 job cuts in the current quarter alone. Prior to this announcement, Citi had alread y cut close to 25,000 jobs since the beginning of this year. Citi's headcount stood at 3,52,000 at the end of September quarter.
A few days after the massive layoff announcement, the US government came in to support crisis-ridden Citigroup with a rescue package that entails an overall capital infusion of about 40 billion dollars, alongside a guarantee for troubled assets worth 306 billion dollars with the bank. The rescue package has stripped down bank's dividend as well as executive compensation payments.
IT Careers: 7 Tips for Job Security in a Bad Economy
Working in today's cutthroat economy has become a lot like the old joke about two guys being chased by a grizzly bear. One guy stops to take off his work shoes and lace up some sneakers. For complete story click here
Layoffs in India
Job cuts in India a reality?
The government may not admit it but experts say layoffs in India are becoming a reality. Companies who are not ready to hand pink slips to their employees yet are grappling with different ways of cost cutting. Software giant Infosys has offered a sabbatical to its employees allowing them to draw half their salary in that period.
At the same time its chief says they will still hire a few thousands this year. “At Infosys we have been very clear that we will take all people we have made offers to and we are on target on that,” said Nandan Nilekani, co-chairman of Infosys Technologies.
On reports of Infosys asking its employees to take a sabbatical, Nilekani said, “The timing is a bit coincidental. We had planned it even when the economy was booming.”
But experts say layoffs will become a reality in India. The head of world's second largest headhunting firm says there will be 5-10 per cent job cuts across sectors.
“Clearly as multinationals are feeling the pinch throughout the entire world, it is going to contract here in India as well. Without sounding too pessimistic, the worst is yet to come,” said Jeffrey Joerres, Global Chairman and CEO, Manpower.
Many say cost cutting is the beginning. If it doesn’t work, companies will be forced to resort to job cuts and with demand shrinking by the day, thousands of workers across sectors face an uncertain future.
At the same time its chief says they will still hire a few thousands this year. “At Infosys we have been very clear that we will take all people we have made offers to and we are on target on that,” said Nandan Nilekani, co-chairman of Infosys Technologies.
On reports of Infosys asking its employees to take a sabbatical, Nilekani said, “The timing is a bit coincidental. We had planned it even when the economy was booming.”
But experts say layoffs will become a reality in India. The head of world's second largest headhunting firm says there will be 5-10 per cent job cuts across sectors.
“Clearly as multinationals are feeling the pinch throughout the entire world, it is going to contract here in India as well. Without sounding too pessimistic, the worst is yet to come,” said Jeffrey Joerres, Global Chairman and CEO, Manpower.
Many say cost cutting is the beginning. If it doesn’t work, companies will be forced to resort to job cuts and with demand shrinking by the day, thousands of workers across sectors face an uncertain future.
Layoffs in India, Outsourcing
India's outsourcing bubble is bursting
Bangalore, India--Once a high-flying tech hub, Bangalore is seeing more sober days in the wake of the credit crisis. For tech employees, jobs no longer come with a lifetime guarantee. It looks like the global economic turmoil and the dramatic Wall Street meltdown is beginning to hit Bangalore.
Until recently, in India's outsourcing hub it used to be one big Googlefest, with all the pampering and cosseting that employees enjoy at the company's Googleplex headquarters in Silicon Valley. I don't know what the latest from Googleplex is. But in Bangalore, it sure looks like the party is slowing down.
The first sign is in real estate. In a city where residential communities like Silver Manor, Golden Enclave and Platinum City sprouted to house thousands of young, upwardly mobile technology workers, instead of 200 million-rupee homes, developers are now beginning to market 2 million-rupee condominiums.
Departmental stores sport 'sale' signs every other week as credit-card-happy tech workers are cooling off consumption. In India's top management schools, including the Bangalore branch of the Indian Institute of Management, technology outsourcing firms, multinationals and Wall Street banks used to slug it out for Day Zero spots during Placement Week. For students in the graduating class, that exercise is months away. But the schools are already planning to offset an expected slowdown in placements by inviting more companies.
The collapse of top US financial firms will cause a dramatic slowdown in hiring among outsourcing companies. The banking, financial services and insurance sectors account for 40 per cent of revenues for India's $52 billion outsourcing industry (as of 2007-2008). Firms such as now-bankrupt Lehman Brothers and bought-out Merrill Lynch were big customers and provided millions of dollars worth of lucrative contracts to Indian technology services companies.
Consequently, in the past home-grown Indian outsourcing companies grew by impressive numbers. Infosys and Wipro, the big two employers in Bangalore, were each hiring 10,000 employees or more during recent years. Such spectacular ramp-ups are unlikely to recur any time soon. One large call centre with European and US customers is now refusing to hire anybody that does not stay within a five-mile radius of their centers: the costs are just too high.
Until recently, in India's outsourcing hub it used to be one big Googlefest, with all the pampering and cosseting that employees enjoy at the company's Googleplex headquarters in Silicon Valley. I don't know what the latest from Googleplex is. But in Bangalore, it sure looks like the party is slowing down.
The first sign is in real estate. In a city where residential communities like Silver Manor, Golden Enclave and Platinum City sprouted to house thousands of young, upwardly mobile technology workers, instead of 200 million-rupee homes, developers are now beginning to market 2 million-rupee condominiums.
Departmental stores sport 'sale' signs every other week as credit-card-happy tech workers are cooling off consumption. In India's top management schools, including the Bangalore branch of the Indian Institute of Management, technology outsourcing firms, multinationals and Wall Street banks used to slug it out for Day Zero spots during Placement Week. For students in the graduating class, that exercise is months away. But the schools are already planning to offset an expected slowdown in placements by inviting more companies.
The collapse of top US financial firms will cause a dramatic slowdown in hiring among outsourcing companies. The banking, financial services and insurance sectors account for 40 per cent of revenues for India's $52 billion outsourcing industry (as of 2007-2008). Firms such as now-bankrupt Lehman Brothers and bought-out Merrill Lynch were big customers and provided millions of dollars worth of lucrative contracts to Indian technology services companies.
Consequently, in the past home-grown Indian outsourcing companies grew by impressive numbers. Infosys and Wipro, the big two employers in Bangalore, were each hiring 10,000 employees or more during recent years. Such spectacular ramp-ups are unlikely to recur any time soon. One large call centre with European and US customers is now refusing to hire anybody that does not stay within a five-mile radius of their centers: the costs are just too high.
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