Indian outsourcing scandal shakes Silicon Valley

The massive fraud that threatens Indian outsourcing giant Satyam Computer Services has sent tremors 9,000 miles to Silicon Valley, long an investor, partner and promoter of the South Asian country's rising tech industry.

The Satyam scandal, centered on $1 billion worth of falsified financial statements, is a severe blow to the image of India Inc. and is causing executives in the Bay Area to balance the risks of outsourcing against the cost savings. It highlights the dangers of U.S. companies handing over critical work to firms halfway around the world that they cannot control.

There is no evidence that U.S. companies directly lost money from the Satyam fraud. However, many could suffer production delays or other indirect losses.

"The question everyone is asking is: Is this the classic cockroach? If you see one, are there more around?" said Vivek Paul, former vice chairman of Wipro Technologies, India's third-largest software-services company, and now a Silicon Valley investor. "History has proven they never come in ones."

Satyam's 53,000 employees, including hundreds in the Bay Area, could lose their jobs. Numerous Fortune 500 companies, which rely on the Hyderabad software company to handle services such as billing and managing back-end systems, may have to scramble to find new outsourcing partners.

Sensitive information
Tech companies that entrust proprietary information with overseas

partners are reviewing their trustworthiness. And the Satyam scandal, which exposed the lack of transparency and potential for corruption among family-owned businesses in India, could cause investors to pull back.

India's emergence as a global tech hub during the past decade has rearranged the global software industry. India's software and services industry, including homegrown companies such as Infosys, Tata, Wipro and Satyam, generates $52 billion a year in revenue. It forced competitors in the West to embrace a global work force to save money and gain footholds in emerging markets. Valley companies now employ tens of thousands of engineers in Bangalore and other major cities in the South Asian country.

The full extent of outsourcing by U.S. companies to India is unknown. However, more than $2 billion in venture capital, mostly from the valley, has been funneled into India in the past four years, according to Dow Jones VentureSource.

Satyam has dealings with numerous valley companies, but those companies typically decline to discuss their relationships with Indian outsourcers. Moving jobs overseas has been a highly charged political issue in the United States.

"It's something we are not commenting on," a Hewlett-Packard spokeswoman said in response to questions about Satyam.
Cisco Systems has had negotiations with Satyam about collaborating on a project, and once considered investing in the company, said a company spokesman. "We do not expect the situation to have any material impact for Cisco," the company said in a statement.

Applied Materials has a "supplier relationship with Satyam and they have employees assisting us here and in India," company spokesman David Miller said in an e-mail. "Beyond that our policy is not to comment on our suppliers' businesses or the nature of our business with them."
But experts say that at the very least, Satyam's implosion could cause customers to flee to a competitor, and that in turn could drive up the costs of outsourcing over the short term.

"If I were a customer of Satyam, I would be concerned about the stability of the company's work force," said outsourcing expert Michael Murphy, a partner with Pillsbury Winthrop Shaw Pittman in San Francisco.

Board members
The fraud also spotlights how many tech executives from the valley sit on boards of Indian companies. Satyam's board included Vinod Dham, father of Intel's Pentium microprocessor, and Krishna Palepu, a Harvard Business School professor and a corporate governance expert. Both resigned from the board. In an e-mail, Dham said it was not "appropriate" for him to comment about Satyam at this time.

Frequently, valley-based board members attend meetings "by phone in the middle of the night," said Rafiq Dossani, a Stanford University research scholar who specializes in relations between Silicon Valley and India.

"They are probably waking up to some realities," Dossani said. "You better not trust management. You have to ask about margins, visit clients. You are being paid a few hundred thousand dollars. You just can't pocket the money and sleep."

Late last week, Indian authorities arrested Satyam's founder and chairman, B. Ramalinga Raju, a familiar face in the valley who has admitted to misstating financial statements. Authorities also dismissed the remaining Satyam board members and ordered a review of the country's largest publicly traded companies.
Today, the Ministry of Corporate Affairs announced appointment of three business leaders to the board: Deepak Parekh, head of the Housing Development Finance Corp. bank; Kiran Karnik, the former head of Nasscom, a trade body of technology companies; and C. Achuthan, a legal expert and a former member of the Securities and Exchange Board of India.

For Satyam, the first warning signs came in December when investors revolted against a plan to spend $1.6 billion to buy a couple of family-owned businesses.
In India, investors are accustomed to some "leakage," but if the company is doing well, they're willing to overlook a family business siphoning off some profits, said one Silicon Valley executive with extensive dealings in India.

The Satyam scandal, though, has upended that arrangement, said the executive, who asked not to be identified. "It's fundamentally shaken investors."
While further revelations about Satyam are sure to come, most experts don't believe they will have long-term harm on outsourcing in India.

"What it will do is make outsourcing customers a little more cautious about who they contract with, and more mindful of the financial risks associated with outsourcing," Murphy said. "Until recently, no one was concerned about that."

But if the attention to this scandal exposes corruption in other Indian companies, the budding business relationship between the United States and India could be at risk, warned investor Paul.

"If there were to be one more mea culpa from an Indian company, we'd have a problem," he said.

Hiring bleak? Here are jobs for Satyam employees

Source: The Economic Times
Minutes after Ramalinga Raju’s resignation hit the headlines, employees of Satyam began looking to exit the company like mice on a sinking ship.

Vinay A (name changed) counted himself lucky that his cousin at an IT company in Kenya let him in on an opening. “However, a lot of my colleagues are really worried. Clients are pulling out of projects and were expecting aggressive downsizing by next month,” he says.

So people are looking for opportunities right away, but with the current slowdown, the hiring scenario looks bleak.

However, there are companies that are hiring in the current scenario and depending on the job profile, one could land a job at companies like Tesco HSC.

The company is looking to add around 1,200 people to its existing workforce of 3,000 plus.

“We would certainly be open to hiring anyone from Satyam. The company is known to have some very high quality talent and we would certainly respect that,” says Sandeep Dhar, CEO of Tesco HSC. “We have seen a sharp increase in the number of resumes in the past few days from people from various companies, including Satyam.”

Headhunters say that IT companies like Microsoft, IBM and Oracle are hiring, though this is primarily only in niche areas. Financial houses like J P Morgan and Fidelity and BPOs like FirstSource are hiring too.

“Insurance firms like HDFC Standard Life, Max New York Life and ING Vysya Life are looking for sales managers,” says a top executive in an HR company.

“We are looking to increase workforce from 160 plus to 250 in next 12-15 months and we have noticed a spurt in resumes from Satyam employees,” says Vani Sathvik, VP (HR) of Eka Software. “We would not discriminate against Satyam employees while hiring as the capability of an individual is unrelated to the deeds of the company’s ex-chairman.”/span>

Job losses in USA: Jan11th update

US job losses hit record in 2008
More US workers lost jobs last year than in any year since World War II, with employers axing 2.6 million posts and 524,000 in December alone. The US jobless rate rose to 7.2% in December, the highest in 16 years.

The official data came as plane-maker Boeing said it would cut 4,500 jobs this year at its commercial airline arm due to the global economic slowdown. US President-elect Barack Obama said that the economic situation is dire and action is urgently needed.

Warner Bros. is preparing to outsource jobs to India and Poland
Warner Bros., following a trend that is now all too familiar among American companies, is preparing to outsource jobs to India and Poland as part of a studio-wide cost-cutting move.

The Time Warner Inc.-owned studio will join other media companies, including NBC/Universal and Viacom Inc., that have initiated cutbacks and layoffs in the face of weakening entertainment industry revenue and the deepening recession.

Although details of the layoffs at Warner are still to be determined, they are nonetheless expected to affect scores of "back office" workers in management information systems, finance and accounting.

Seagate Plans Round of Job Cuts, CEO Watkins Says
Seagate Technology, the world’s biggest maker of hard-disk drives, plans to cut jobs and reorganize the company as it copes with the slumping economy, Chief Executive Officer William Watkins said.

“We are going to announce another round, and we think we’ll do it in January,” Watkins said today in an interview at the Consumer Electronics Show in Las Vegas. “There will be restructuring, and there will be some layoffs.”

Cirrus Design Corporation Layoffs
Just four days after most of its workers returned to the job Cirrus Design Corporation has announced another round of layoffs.

Cirrus officials say 50 administrative positions have been eliminated and nearly 100 furloughed workers will not be returning to work for the time being.

U.S. Job Losses in Dec. Could Be Worst in 60 Years
U.S. job losses in December could be the worst in almost 60 years as companies scramble to cut costs even deeper to survive the country's economic and financial storms.

A barometer on layoffs is expected to show Thursday that the number of newly laid off people signing up for state unemployment insurance last week rose to 540,000, up from 492,000 in the previous week, according to economists' projections.

Satyam employees send out resumes, but market tough

Employees of embattled Indian outsourcing firm Satyam Computer Services Ltd are scrambling to send their resumes to job portals and other firms, but finding work may be difficult given tough market conditions.

As of September-end, Satyam, the country's fourth-biggest software exporter now bearing the dubious distinction of having perpetuated India's biggest corporate scandal in memory, said it had 52,865 employees in all.

On Wednesday, after chairman B. Ramalinga Raju quit and said profits of the company had been inflated over the last several years, interim CEO Ram Mynampati, in a letter to employees, apologised for the "uncertainty and inconvenience" caused.

Warning employees of a "tumultuous quarter", Mynampati asked for their "involvement and ideas".

But that did not appear to be a top priority for employees who seemed agitated as they entered the company's sprawling headquarters in the southern city of Hyderabad.

"How would you feel if you were in my position?" said one employee, reacting angrily to a reporter's question.

Local newspapers said hundreds of employees had begun sending out their resumes to job portals and to other software firms.

But with a global slowdown putting the brakes on India's $50 billion IT industry, jobs will be difficult to come by.

Nasscom, the industry body, had earlier said it did not foresee job cuts, but lowered its 2008/09 job additions target to 200,000 from 270,000. Wage increases were expected to be moderate for the next two years in the industry, Nasscom has said.

"Today the market is not such that they will be absorbed easily," said Karthik Shekhar, general secretary of UNITES, an international outfit representing software professionals.

"We are in touch with the employees. They are waiting for more clarity from the management, but they are sending feelers."

Satyam is due to hold a news conference at 1130 GMT.

Satyam's rivals, who ware expected to pitch for its clients including General Electric, Nestle and Qantas, may be able to absorb some employees.

"If the employees go with the business, I reckon 55-60 percent of the employees will find work," said Mohandas Pai, director of human resources at larger rival Infosys Technologies.

"Clients are likely to retain project managers and developers, so, in a worst-case scenario, about 40 percent of employees are at risk," he said, but declined to say if Infosys would consider pitching for Satyam clients or hiring its employees.

A project manager at an international IT services firm said he had received about four or five frantic calls from Satyam project managers, asking for jobs.

Others are choosing to pursue different options: a developer who has been with Satyam for seven years said he had been planning on taking a break to do a Ph.D for some time. This is a good time to do it, he said.

TCS, Infosys, Wipro and HCL to bag deals worth $4 bn

Tech biggies such as TCS, Infosys, Wipro and HCL are all set to get new outsourcing contracts worth $4 billion from top customers including British Telecom, Citi, GE and Bank of America this year. In a bid to cope with their tightened budgets, these companies plan to send their information technology works to offshore locations such as India.

Among some of the top deals coming to India, $250-million outsourcing contract being considered by Australian phone firm Telstra is expected to be finalised by the end of January, followed by several contracts worth between $50 and $100 million from Citi, BT, GE and other customers.

Outsourcing expert Sabyasachi S Sathyaparasad of Mindplex Consulting said that the new deals will include long-term application maintenance contracts. However, even as these customers seek to award new projects by renewing existing contracts, Indian vendors may lose over $300 million because of lower billing rates.

“Many large customers have reduced their IT budgets by up to 10%, and they plan to seek more cost and business output-based deliverables from service providers in these difficult times,” he said.

IGate May Seek Merger With Satyam If Board Sells

IGate Corp., a U.S. based computer services provider with operations in India, may consider merging with Satyam Computer Services Ltd. if the software exporter’s new management seeks a strategic partner.

Satyam Fraud: updates

Big clients plan to exit Satyam
Major clients of Satyam Computer Services, such as General Electric (GE), Nestle and British Petroleum, have started exploring alternative options such as moving work to other outsourcing vendors.

GE, the largest client for Satyam, is learnt to be evaluating options of inducting the Satyam team working on its IT project or convincing other IT vendors to merge this team with their resources to ensure continuity of work. A source familiar with the matter said talks are on with other outsourcing vendors. Satyam’s bigger rival Tata Consultancy Services (TCS) already provides services to GE.

PwC Hyderabad staff asked to stay away from office
As the Satyam saga unfolded on television, the first to leave office weren’t just Satyam employees, but employees of the company’s audit firm Pricewaterhouse-Coopers (PwC) as well.
Suitors list's long, but L&T seen best match for Satyam
The suitors for the tainted Satyam Computer Services range from European and US IT majors, such as Logica and Perot Systems, to niche Indian players, such as Tech Mahindra. But the best match may be L&T, which has tried to scale up its infotech business for long without much success.

L&T Infotech has lagged many of its peers in growth, despite having the backing of the country’s largest engineering company. Acquiring Satyam will help L&T Infotech consolidate its strength in manufacturing and also give it size and scale through Satyam’s ERP practice, which is its strongest area. Among Infosys Technologies, Tata Consultancy Services, Wipro and HCL Technologies, Satyam has the strongest ERP practice.

Credit cards bills, EMIs give Satyam staff nightmares
Credit card dues and EMIs for various loans are giving sleepless nights to thousands of Satyam Computer’s employees called ‘Satyamites’.

“Even if we are not retrenched, we may face cuts in our salaries. This whole thing is not our fault,” said one employee who, like all others interacting with the media at Satyam campus, spoke on condition of anonymity.

Can Satyam pay salaries to staff?
A legendary entrepreneur overstated his company’s assets and understated the liabilities. Many clients who had reposed their trust in Satyam may feel cheated and might walk away. In the hypothetical scenario of Satyam facing a zero-revenue and zero-account receivables situation starting today, how long would it be able to pay its 53,000 employees?

The ‘fudged’ cash and bank balances could have lasted them 10 months but Ramalinga Raju has already confessed on Wednesday that Rs 5,040 crore out of the Rs 5,361 crore is non-existent.

Satyam employee numbers are also inflated
Satyam’s 53,000 employees are also inflated like the company’s cash reserves to siphon off funds in the name of non-existent associates , say analysts now looking at the company with a scanner. “The figure of 52,865 associates could actually be a much smaller number, with the additional numbers used for ‘‘ other purposes.’’

Sources say that two years ago the company was aiming at a headcount of 80,000 by Q1 2009 and Raju’s ambition to turn Satyam into a multicultural enterprise helped the firm fudge employee figures.

Troubles of Satyam Could Benefit Rivals and 2 U.S. Companies

 The financial fraud at Satyam is rippling through the technology services industry, as customers scramble to line up other suppliers and rivals look to pick up business. 

Already, competitors are angling for a share of Satyam’s nearly $2 billion in annual revenue. The big winners from the fallout are likely to be two American companies, Accenture and I.B.M., Rod Bourgeois, a technology services specialist at Sanford C. Bernstein & Company, said Thursday.

Accenture and I.B.M., Mr. Bourgeois said, have three advantages over other competitors. Each company already supplies most of the blue-chip corporate clients of Satyam. I.B.M. and Accenture have built up their Indian operations in recent years, so they offer Satyam customers the same skills at competitive prices. And they are not Indian companies.

The $50 billion-a-year offshore outsourcing business was growing at a 29 percent annual rate until the credit crisis hit last fall, Mr. Bourgeois said. But he now forecasts growth in 2009 to be about 10 percent.

The impact on other Indian outsourcing companies is unclear, but analysts say that, long term, the fraud could have wide implications. The scandal at Satyam — a company listed on the New York Stock Exchange and audited by an American accounting firm, PricewaterhouseCoopers — raises doubts about other Indian companies.

“This is a crisis of trust,” said Frances Karamouzis, an analyst at Gartner. “It’s not really Satyam at stake; it’s the India Inc. brand.”

The big Indian outsourcers like Tata Consulting Services, Infosys and Wipro could pick up business as a result of Satyam’s travails. The same is true, analysts say, for Cognizant Technology Solutions, which has its headquarters in Teaneck, N.J., but most of its operations in India.

Yet in the business of outsourced technology services, where suppliers build and maintain a customer’s vital software, reputation matters a lot. Companies often depend on their outsourcing suppliers to manage the technology behind basic tasks like billing, purchasing and customer relations. In the corporate market, it is said, customers are not buying technology, which can change rapidly, but buying a relationship with a supplier.

For that reason, Ms. Karamouzis said, the odds are that the Indian government and the industry’s powerful trade group, Nasscom, will develop a rescue package for Satyam, if necessary.

For corporate customers, the crucial resource is the software developers at Satyam, far more than the corporate entity itself. Satyam’s strongest business is maintaining and customizing so-called enterprise resource planning software, typically from SAP and Oracle, which runs the basic operations at companies.

Ms. Karamouzis said Gartner’s advice to clients was to identify by name the most important Satyam developers working on a company’s outsourced software projects. Then, she said, companies must assess the risk at Satyam, which may include sending people to India for a first-hand look.

In a letter to the Satyam board on Wednesday, Ramalinga Raju, the chairman and co-founder, said that the company’s cash reserves were about $69 million, instead of the $1.1 billion reported last year.

“If they don’t make payroll, there will be a mass exodus of employees,” Ms. Karamouzis said.

If Satyam remains intact, she said, companies may well want to offer bonuses to keep the important engineers working on their projects, instead of defecting to outsourcing rivals.

The Satyam setback has occurred at a time when the once-torrid growth of the Indian technology outsourcing industry has been slowing significantly. The terrorist attacks in Mumbai last November and a stronger rupee, analysts say, have prompted some companies to look at lower-cost alternatives in China, Mexico and Brazil.

But the main reason is the sudden slowdown in the global economy, especially the crisis in the financial services sector, a large source of business for the Indian outsourcers.

Yet when the global economy comes out of its slump, many analysts expect the growth of the leading Indian outsourcers to pick up, if not to the previous levels.

“The golden age of very high growth and financial returns is over,” said John C. McCarthy, an analyst at Forrester Research. “But Satyam and the current economic troubles do not change the fundamental economics of offshore outsourcing.”

Forrester projects that the offshore outsourcing business will grow by 17 percent annually through 2012.

Layoffs in USA: Jan 8th Update

Lenovo confirms 2,500 in Layoffs
Lenovo, China's IT giant, announced today it would cut 2,500 jobs in the first quarter of 2009 and merge its Greater China operations with its Russia and Asia-Pacific operations.

The announcement was posted on the Hong Kong Exchange website early this morning. The 2,500 jobs to be cut, including managers and senior managers, accounted for about 11 percent of Lenovo's global workforce. The annoucement didn't say which of its divisons the cuts would fall in.

Google Confirms Layoffs Of Contract Employees

Walgreen to Cut 1,000 Jobs, or 9% of Work Force, to Save $1 Billion
Walgreen Co. is eliminating about 1,000 jobs, or about 9% or its work force, as the nation's No.2 drugstore chain continues to rein in costs amid a cutback in consumer spending and increased competition.

The company said it is offering early retirement and severance incentives to some of the corporate and support employees in an effort to reduce the number of layoffs set to start next month.

Hawker chief expects more layoffs
In a letter to Hawker Beechcraft employees today, chief executive Jim Schuster said he expects more layoffs at the Wichita planemaker

Fiat announces white-collar layoffs
The Italian automaker Fiat Group SpA's layoff plans are now hitting white-collar workers. Fiat informed unions this week that 1,800 white-collar workers will be temporarily laid off for the first week of February, and 1,500 during the second week, the company confirmed Thursday.

Market slowdown blamed for Severstal layoffs
Faced with a steel market slowdown and light order books, Severstal North America Inc. said Thursday it is continuing temporary layoffs that began in December.

ON Semiconductor announces 500 layoffs, restructuring
ON Semiconductor Corp. is scaling back costs in 2009 and issuing a lower forecast for the year as the company looks at laying off 10 percent of its work force, closing plants temporarily and giving employees unpaid time off. That effects 500 employees in Gresham.

AK Steel Begins Salaried Work Force Layoffs
AK Steel Holding Corp. (AKS) said it will begin laying off salaried employees about a month after announcing a companywide 5% pay reduction as the steel industry struggles with falling demand and prices.

Schlumberger eyes job cuts beyond North America
Schlumberger Ltd (SLB.N), the world's largest oilfield services provider, plans to shed 5 percent of its North American workforce, or 1,000 jobs, and is looking at cuts elsewhere, a spokesman said on Thursday.

Nissan to cut 1,200 jobs
Japanese car giant Nissan is to cut 1,200 jobs in Sunderland due to a sales slump caused by the global economic slowdown, it said Thursday.

Satyam Scam: Employees in trouble

10,900 Satyam resumes float on job portals
Bangalore: Employees in the troubled Satyam computers have lost trust in their company. Now many are experiencing the same feeling of a current fresh graduate, as majority of its employees are now in search of their bread and butter. As per an analysis by Siliconindia, 10,900 satyam employees have posted their resumes on the top job portals since one month, where in Satyam showing signs of trouble.

In the last one month only 7,258 resumes were posted by the employees in one of the major job portals. During the last one week, followed by the resignation of independent directors, about 4,714 employees have posted their resumes on the job portals. Shockingly, last three days major job sites have received over 1220 resumes from employees and still the number seems to be increasing.

IT vendors get ‘feelers’ from Satyam clients
The nervousness among clients of Satyam – following a massive accounting fraud – is now apparent.

Even as Satyam customers officially continue to be in a wait-and-watch mode, many IT vendors claim that there has been a rush of calls from some clients who are keen to explore the possibility of migrating projects.

In effect, behind-the-scene exploratory talks have picked up pace just a day after the shocking disclosure on financial irregularities by the Satyam promoter, Mr Ramalinga Raju.

Rival firms plan to tap talent as Satyam workers look for jobs
Executives at job search firms have started receiving more calls and resumes from employees of Satyam Computer Services Ltd in the last two days even as the beleaguered firm’s top leaders on Thursday pledged to stay.
Vipul Varma, director, Focus Management Consultants Pvt. Ltd, a Mumbai-based information technology (IT) recruiter with offices in Bangalore, Chennai and Pune, says he has received around 100 resumes from Satyam employees in the last two days. In the last three-four weeks, he has received around 400 resumes. “The increase is, however, not very sharp compared to what we saw during the collapse of an investment bank recently,” he adds.

Infy not to hire Satyam employees
Infosys Technologies, the country’s second-largest IT services exporter by sales, has told its human resources (HR) executives to refrain
from hiring employees of Satyam Computer Services.

This comes a day after revelations of financial fraud at Satyam, which has left its 53,000 employees in a state of uncertainty.

“We have asked our recruitment staff not to poach anybody from Satyam. The company is in the middle of a crisis and people will jump ship,” Infosys Technologies HR, education & research and administration director TV Mohandas Pai told ET. On Wednesday, Infosys had ruled out any possibility of taking over Satyam. “We will not touch such a tainted company,” Infosys founder and non-executive chairman N R Narayana Murthy had said.

More:
All the Rajus at Satyam

NewYork Times story on Satyam

Satyam Fraud: The big questions

Satyam Scam [Update]: 2 Law suits in USA; Clients contacting Satyam rivals

Sarraf Gentile LLP Charges Satyam Computer Services Ltd.
With Securities FraudThe law firm of Sarraf Gentile LLP has filed a securities fraud class action lawsuit against Satyam Computer Services Ltd. ("Satyam" or the "Company") (NYSE: SAY) on behalf of those investors who acquired the Company's American Depository Shares during the period January 6, 2004 and January 6, 2009, inclusive (the "Class Period"). The lawsuit is pending in Manhattan federal court.

Australian cos in disarray over IT export to India
Nearly two-billion accounting fraud admitted to by the former Satyam Chairman is likely to cast its shadow over the Australian companies' plans to outsource IT jobs to India, according to a media report.

"Corporate Australia's push to export IT jobs to India is in disarray following a $1.84 billion fraud involving one of the key outsourcing companies," Australian daily Herald Sun said.

Telstra, Quantas, Coles National Australia Bank (NAB) and Suncorp are amongst the several Australian companies which has been affected by the Satyam scandal.

According to the report, Satyam Australia employs about 1,700 local staff. Apart from Australian clients Satyam's clientele include Citi Group and Nissan Motor Corp.

FIFA 'closely monitoring' World Cup sponsor Satyam
World football body FIFA, one of the most coveted clients of the beleaguered Satyam Computer, on Thursday said it was closely monitoring the developments.

"FIFA is closely monitoring the situation related to Satyam," a FIFA spokesperson said from Zurich. Satyam is the information technology partner for the 2010 and 2014 FIFA World Cups.

Satyam looks out for a buyer

The cat is finally out of the bag and this time it’s straight from the horse's mouth.
Satyam is looking out for a buyer, who will help pump in money and keep the company running.

There are many suitors waiting in the aisles but according to those who have known the merger play at Satyam closely, there were at least seven contenders for Satyam before the ugly truth unfolded.

However, business is still there and most parties are still interested.

While there are three American companies including IBM in the list, one Japanese suitor, Fujitsu or Hitachi, might be interested, too.

Also, one European company possibly Capgemini and two Indian companies, L&T Infotech and Tech Mahindra, are the ones doing the rounds.

While the institutional investors are dumping Satyam stock in bulk, L&T Capital is buying and is now the largest stakeholder in Satyam with over four per cent.

L&T Capital thus, could be the king maker or can buy out Satyam and expand its tech arm, L&T infotech.

Although it’s a possibility that the company denies at the moment, NDTV learnt from sources that the option cannot be ruled out.

Besides, a consortium of big stakeholders like L&T, LIC and other mutual funds could also come together to takeover the company.

Meanwhile, sources also say that non IT companies, including large business houses like ADAG, might see this as an opportunity to shore up their IT presence.

But, Satyam certainly would need a brave buyer, as the company now faces a class action suit in connection with Upaid’s billion dollar claim and possible criminal proceedings in India.

Now, the ‘White Knights’ are the only hope for Satyam at this hour, but an IT company is all about its employees and clients.

They would have to keep them together because if they part ways with Satyam, there will be very little left to buy.

Satyam out, HCL takes 4th position in Indian IT

With Satyam’s disclosure of falsifying revenue figures, HCL Technologies becomes the fourth-largest Indian IT services firm by revenues. Analysts say HCL’s recent acquisition of Axon Group had bridged Satyam’s lead over it to some extent and the latest development clearly takes HCL up the rankings.

As per Satyam chairman B Ramalinga Raju’s letter to the company’s board on Wednesday, the company’s actual standalone revenues for the July- September quarter in 2008 were Rs 2,112 crore, while it had reported revenue figures of Rs 2,700 crore. Adding revenues from subsidiaries of Rs 120 crore, its actual consolidated revenues would be about Rs 2,232 crore. HCL Technologies had reported revenues of Rs 2,369.3 crore for the same quarter.

20,000 jobs to go at Dell, IBM and Lenovo

Layoffs in IBM, Dell and Lenovo
The economic crisis has started to really take aim at the IT market, and the latest companies in the cross-hairs would appear to be Dell, IBM and Lenovo.

Back in June it was being reported that the credit crunch would not impact upon IT spending. What a difference six months makes. Things started looking bad at the end of 2008 when 17,500 job cuts were reported as hitting BT, Sun and Yahoo! Now Dell, IBM and Lenovo look like shedding more than 20,000 staff between them.

The BBC is reporting that Dell will cut a whopping 1900 of the 3000 jobs at the manufacturing site in Limerick, Ireland as a result of moving production to Poland where staffing costs are cheaper.

Sean Corkery, Dell VP for the EMEA region, called it the decision to cut staff "the right one for Dell to become even more competitive." It is understood that the remaining Limerick staff will focus their attention on supporting overseas manufacturing.

Meanwhile, there are reports that IBM will lay off some 16,000 US-based staff in addition to the 15,000 that have already been cut. One analyst warning that it is "another morbid sign that we’re still in the teeth of this economic hurricane."

Which leaves us with Lenovo, whose shares were suspended from the Hong Kong stock exchange prior to announcing a swathing round of layoffs and a global restructuring plan which includes consolidating the Chinese and Asia Pacific outfits into a single unit.

This will impact both upon staff, some 2500 of whom worldwide are likely to lose their jobs, as well as pay for executives which is expected to be cut by as much as 50 percent. It works out to around 11 percent of the global Lenovo workforce facing the axe in an attempt to make savings of USD $300 million during the next fiscal year.

Lenovo chairman, Yang Yuanqing, said in a statement that "We are taking these actions now to ensure that in an uncertain economy, our business operates as efficiently as possible..."
Source: ITWire

Google Layoffs: 6000 Cut - Details Kept Off Web

On November 2008 we reported that Google has been quietly laying off staff since August and up to 10,000 jobs could be on the chopping block. The next day, Google shares (GOOG) hit an all-time low of $257.44 under heavy volume and closed at the lowest level since going public. Also, on the same day Google CEO, Eric Schmidt, told Bloomberg many things but there was no mention of layoffs.

Today, in documents obtain by the Associated Press, Google filed a paper document with the SEC stating that “a substantial number of temporary workers” had been laid off. The company has sought special exemption to keep the document from circulating on the Web.

The document states that Google has 24,400 employees, however on September 30, 2008 the company reported to the SEC that it had 20,123 employees when in reality it had 30,000. At that time Google did not report the 10,000 temporary employees to the SEC, because Google wanted the option to lay off employees on demand to meeting earning expectations without reporting to the SEC.

Now the company says 4,300 of the 24,400 employees are temporary. So why report temporary employees now and not then? Why get an exemption to keep the documents private?
Further the company reported 30,000 employees on November 24, 2008 and 24,400 on Dec 15, 2008. Where did 6,000 employees disappear to in 3 weeks?

It is bizzare that the biggest web company would seek an exemption to keep public documents about itself off the web. Why the secrecy? Besides, Google knows everything about you. What is Google hiding?

Google Confirms Layoffs Of Contract Employees

Google's made no secret of its plans to pare down what cofounder Sergey Brin described last fall as a 10,000-member contractor workforce.

What Google has kept secret, however, is how many of that 10,000 will lose their jobs.

The Associated Press reports that Google has released “a substantial number” of its contract and temporary employees, but the exact number isn’t known.

The news isn’t a surprise; in October, Google co-founder Sergey Brin told the San Jose Mercury News that the company would reduce some of the 10,000 contractors on its payroll as a cost-cutting move. Additional reports followed in November here on Search Engine Land and CNET.

News of the layoffs comes in an SEC filing that Google cleverly submitted on paper last month, thus keeping the document out of the SEC’s online database and off of other sites that track SEC filings.

Although the filing doesn’t reveal the number of contractors laid off, it does say that Google has 24,400 employees — 4,300 of which are temporary/contract employees and interns. A Google spokesperson told the AP that the 4,300 employees mentioned in the SEC filing are “subset” of the 10,000 Brin mentioned in October.

In the SEC filing, Google also said it will continue to spend on research & development and buy other companies at a pace consistent with the past two years.

Satyam may axe 10,000 employees next month

With a big questions mark on its cash position and a minimum outgo on salary estimated at Rs 500 crore a month, Satyam may lay off over 10,000 employees next month, says a recruitment firm.

"It is most likely that Satyam will cut 10,000 jobs next month as the company is left with no cash to pay the salaries. The current fiasco is likely to put pressure on salaries, which may reduce by 10 per cent due to the surplus of about 20,000 people in the jobs market," Headhunters India CEO Kris Lakshmikanth said.

Satyam interim CEO Ram Mynampati while admitting that the cash position is not encouraging, the company, however, has taken care of salary for December. Lakshmikanth said till Tuesday evening there were about 7,800 people from Satyam who had posted their resumes on job sites and by Wednesday afternoon, it has gone up to 14,000.

The uncertainty about jobs is killingly painful for the 53,000 employees of Satyam, especially when the industry is going slow on recruitment. Further, possibility of a takeover too looks distant as the accounting fraud done by the company would make it difficult for any firm to evaluate its correct market value, which is compounding the worries of the employees.

IT-BPO union Unites Professionals general secretary Karthik Shekhar said, "In case of any lay off at Satyam, we may take legal action." "We have received over 7,000 hits since the news break.

On Wednesday, in one hour we have seen over 800 hits (no of people visiting the site) from Hyderabad. People have been enquiries on how the union can help them," Shekhar added.

Layoffs in USA: Jan 7th Update

EMC to cut 2,400 from workforce
Storage giant EMC on Wednesday announced plans to cut 2,400 positions from its workforce, despite expectations of posting record fourth-quarter revenues .The job cuts will represent 7 percent of the company's workforce, as part of a restructuring program that will also include consolidation of facilities and back office functions, and a rebalancing of products and markets.
EMC expects to cut $350 million in costs this year and as much as $500 million next year.

Lam Research to cut 149 jobs:Fremont-based Lam Research is expected to carry out the largest job cuts when it eliminates 149 jobs in that city, the government filings by the semiconductor equipment maker show. The Lam cuts in Fremont are scheduled for Jan. 20
Mattson Technology, a chip equipment maker, eliminated 30 jobs on the last day of 2008. In October, Mattson cut 80 jobs.

Barclays cuts more than 400 IT jobsBritish bank Barclays PLC said Wednesday it was cutting more than 400 technology jobs after a review of its operations.
The bank said the job cuts were designed to eliminate obsolete or duplicated roles and affected 158 permanent IT staff and 250 contractors based mostly in London and Cheshire, northwest England.

Satyam’s loss is others’ gain

Satyam stands to lose half its customers to rivals/competitors

Bangalore: Satyam Computer Services Ltd may lose as much as half its customers, some of them to its rivals such as Tata Consultancy Services Ltd (TCS), Infosys Technologies Ltd and Wipro Ltd, after a revelation by its chairman that the firm inflated revenue and profits for several years.

Tech Mahindra may evaluate telecom biz of SatyamSoftware company Tech Mahindra today said it may evaluate the telecom business of the Satyam Computer Services for acquisition. It said the interest areas for Tech Mahindra could be taking over the telecom contracts and the employees associated with the vertical.

Trusty Infosys Sitting PrettyWell regarded competitor likely to pick up clients from scandalous Satyam. As the Indian stock market was punished Wednesday for the scandal at Satyam Computer Services, there seems to be one company that could benefit from those troubles: rival outsourcer Infosys.

Cisco: Satyam Woes Not Expected To Hurt Cisco BusinessCisco Systems Inc. (CSCO), which is one of the clients of Indian software services firm Satyam Computer Services Ltd. said Wednesday the developments at Satyam aren't expected to hurt the company's business.

Satyam Scam: News in US Media

The Satyam Scandal: from Forbes.com

Satyam chairman admits fraud: from CNN.com

India Outsourcer Discloses Fraud: from Yahoo news

Shame of Satyam: from Wall Street Journal

Other:
Satyam scam: Auditors in the line of fire

Satyam: Is Raju telling the truth even now?

Satyam Crisis: More troubles to come

Trouble has not ended for Satyam; Upaid case pending in Texas
Satyam has to pay 5000 cr INR if Upaid win over Satyam.

Satyam Computer Services, whose founder-chairman resigned, hasn't seen the last of its trouble as a Texas district court is scheduled to hear a case file against it by a British mobile solution firm, over the Maytas deal today.

Upaid, which is already fighting a forgery case against Satyam in a US court, had filed a motion against the software major with the state court, saying that they are looking for a testimony from Ramalinga Raju, CFO Srinvas Vadlamani, and the company's Head of Corporate Governance Jayraman after the abortive Maytas deal.

Upaid had filed a petition in Texas seeking details of the $1.6 billion acquisition of two Maytas firms, promoted by Raju's family, before Satyam dumped the deal after attack from investors.

Aberdeen, Swiss Finance exit SatyamTwo major institutional shareholders of Satyam Computer Services today exited the company following its founder-chairman Ramalinga Raju’s revelation of fraud in the IT firm’s balance sheet.

More News:
DSP Merrill Lynch terminates its engagement with Satyam

Satyam's path to disaster

Raju's resignation letter

Satyam's Statement to media

More than 2,440 Satyam staff post resumes on job portals in last 3 days

Bangalore: Employees in the troubled Satyam computers have lost trust in their company. Now many are experiencing the same feeling of a current fresh graduate, as majority of its employees are now in search of their bread and butter. As per an analysis by Siliconindia, 10,900 satyam employees have posted their resumes on the top job portals since one month, where in Satyam showing signs of trouble.

In the last one month only 7,258 resumes were posted by the employees in job portals. During the last one week, followed by the resignation of independent directors, about 4,714 employees have posted their resumes on the job portals. Shockingly, last three days major job sites have received over 1220 resumes from employees and still the number seems to be increasing.

The shaky Satyam has witnessed the exits of well known Independent Directors - Mendu Rammohan Rao, Mangalam Srinivasan, Vinod K. Dham and Krishna G. Palepu. The resignation of the company's Founder and Chairman B. Ramalinga Raju is worsening the crisis further and more and more employees are expected to post their resumes in career sites.

The employees have already begun to approach the recruitment firms also. "We have got a number of calls in the past few days from people in the Vice-President, Senior Vice-President level and above, looking for other options," Kris Lakshmikanth, Chief Executive Officer of Bangalore-based Head Hunters India told Financial Express last week.

Earlier the company decided to give pink slips to nine percent of its total 51,000 employees in September. However the current situation is aggravating to loose the confidence of the current employees in Satyam.

Outsourcing shifts beyond Bangalore, Mumbai

Source:Silicon.com
India's traditional outsourcing centers appear to be falling out of favor.According to Pierre Audoin Consultants, outsourcing companies are increasingly looking outside Bangalore and Mumbai when choosing bases in which to set up shop.

PAC found that while India remains popular with the top 50 outsourcing companies--11 of the 49 new offshoring delivery centers set up in 2008 were based in the country--vendors are progressively creating more bases in cities such as Chennai, Noida, Hyderabad, and Pune.According to Nick Mayes, a senior consultant at PAC, conditions for outsourcers in Bangalore and Mumbai are no longer as favorable as they once were.

"Over the last two or three years, labor markets, particularly in Bangalore and Mumbai, have become overheated. The big IT services companies and multinational companies have been competing very intensely for the best resources coming out of the universities and also resources from their rival organizations," he told Silicon.com.

Big Indian outsourcers TCS and Wipro have been first to turn to the second tier, establishing links with the universities and inspiring a shift toward cities like Chennai and Pune.
The consultants also found a trend among outsourcers to spread outsourcing sites over a number of countries.

"(Outsourcers) are spreading not just the risk but also being wary of being overdependent on single-market terms of salary inflation in that country or the political environment in that country," Mayes noted.

Over 2008, PAC found that 10 new outsourcing centers were opened in Latin America and another six in China, while Mayes believes Malaysia and the Philippines will also increasingly prove to be attractive outsourcing destinations.

While similarities in business culture and language will keep India at the top of the United Kingdom's list of outsourcing hot spots, Eastern Europe and Russia could be set to emerge as an alternative.

"There's some fantastic technical skills coming out of the former Soviet Union--guys with 20 or 30 years' experience of programming for military organizations and things like that," Mayes said.

"Slowly but surely," he said, "companies are starting to get the supplier marketplace in place to be able to support Western clients--previously, it was 10 or 20 man outfits out there, but we're starting to see some sizeable companies build up, and that's what Western clients want to work with. They want the security of knowing the company they're working with will be around in 12 months time so they can commit to serious business with them."

Satyam scam: Is the IT dream over?

Satyam might be facing the heat right but the Satyam saga has clearly dealt a blow to the Indian IT dream.

The IT industry represents modern India. They are the ones who have created brand ‘India’ on Wall Street.

But Raju's fraud might change the Indian IT dream forever.

After all, the fourth largest Indian IT company, Satyam has fallen off the cliff, in what unfolds as the most dramatic frauds of recent times.

Now, the clients would think twice before engaging with an Indian IT vendor.

The reason is simple—they would ponder over whether the law of the land can be trusted anymore. However, Narayan Murthy, the founder of Infosys, said "One apple is bad doesn’t meant everyone is bad."

Well, even as Murthy calls it a one off case, Infosys has already started promising more disclosures to its investors and whatever it takes to keep the clients’ trust.

Also, industry body Nasscom has swung in action, asking companies to switch to the top gear so as to retain their clients.

Som Mittal, President of Nasscom, said,"We are asking companies to make more disclosures on governance issues to their clients."

It’s certainly going to be tough ride for the Indian outsourcing industry with the recessionary pressure of the west on one hand and now, an image crisis.

Meanwhile, the international biggies like IBM and HP will benefit directly, unless the industry leaders go all out to defend their credibility.

Source: NDTV Profit

Satyam Crisis: Satyam chief Raju resigns, admits Rs 7,000 cr fraud

Chairman of Satyam Computer Ramalinga Raju has resigned from the company’s board. In a shocking disclosure, he has revealed some financial irregularities in the company, including an inflated cash balance of Rs 5,040 crore.

In reaction to Raju’s revelations, the stock was hammered by investors and it is down over 60 per cent. 

Raju said that he feared takeover due to poor finance performance. Coming clean on financial irregularities, he said that the company had Rs 1,230 crore worth of understated liability as of September 30. 

Raju also revealed that he tried to fill fictitious assets with Maytas deal. 

He said that the company carries inflated cash balance of Rs 5,040 crore. He also reported of Rs 588 crore artificial cash in Satyam’s books.

Raju said that every attempt to eliminate the gap failed. On Raju’s disclosure, Sebi chief said the issue has serious implications and the regulator will take coordinated action. 

His decision was conveyed to the company’s board members. The company was supposed to hold a board meeting this Saturday.

More interesting news from Bloomberg.com

Layoffs in USA: Jan 6th update

Agilent Technologies confirms the reducing jobs and pay worldwideAgilent Technologies recently confirmed a restructuring program that will result in a reduction in about 800 positions worldwide and a temporary across-the-board pay reduction. But thanks to lessons from the technology bubble, the company is also saving more than 1,000 jobs through recession planning.

The California-based company approved the cost-cutting measures on Dec. 12. The plan calls for a reduction in 300 temporary positions and 500 "regular" positions as well as a pay reduction of 5 percent to 10 percent for its workforce worldwide.

Logitech to layoff 15 pct salaried staff Logitech International SA, a maker of mouse, webcams and other computer peripherals, said Monday it is cutting its salaried work force by 15 per cent in response to weak consumer demand amid what it expects to be an extended global downturn

Cigna To Cut 1,100 JobsCigna Corp will cut 1,100 jobs, or about 4% of its worldwide work force, and consolidate some locations to strengthen its competitive position amid the economic downturn.

McGraw-Hill Cuts 375 More Jobs McGraw-Hill Cos. said it cut an additional 375 jobs during the fourth quarter, primarily in its education business, putting the year's reduction at 1,045.

IBM and Microsoft layoff rumours still going on.

Laid off? Hyundai will take your car back

The automaker's new incentive program aims to reassure car buyers who are worried about losing their jobs.

Hyundai Motor America is taking aim at Americans' worries about job security: If you buy a new Hyundai and lose your job within a year, you can give it back.

Hyundai is offering the program because its own market research showed car shoppers weren't attracted by rebates and other more normal incentives, said Joel Ewanick, Hyundai America's vice president for marketing. People are simply too worried about making payments no matter how good the deal is.

To get the benefit, the vehicle buyer must have made at least two payments before filing for the benefit, and buyers are responsible for any payments due before filing.

Satyam Crisis[Update]: Promoters stake falls to 3.6%; No pink slips; 120 resigned

Promoters stake in Satyam falls to 3.6%:
The promoter holding in Satyam Computer Services today fell to 3.6 per cent after institutional lenders sold 24.52 million shares, the company said in a stock exchange filing.

Satyam's woes deepen, 120 employees resign:
Sources told that at least 120 of Satyam's employees from the lower and middle rung management have resigned after the Satyam-Maytas fiasco broke out and as many as 100 more, including the senior level management, are waiting to take a decision after the board meeting expected to take place on January 10.

The biggest uncertainty is apparently amongst the software development and BPO divisions.
However, when contacted Satyam said that 100’s a number, which is very diminutive and that such things happens very often, so aren’t indicative of recent events.

For a company with over 50,000 employees, such a number of more than 120 employees leaving may not sound very big.

But the job consulting firms say that in a bad market this number could be significant and that too because HR firms have received job enquiries from as many as 150-200 employees of Satyam, including some calls being made from the top management.

Evaluations over, no pink slips:
Satyam Satyam Computer Services has stopped issuing pink slips to its employees in a bid not to add to its problems following the aborted December 16 deal to acquire Maytas companies and the negative fallout.
“It seems the company has stopped this process for a while because of the current crisis,” a Satyam employee, on condition of anonymity, said.The company had reportedly continued to give pink slips to its associates, following what it called Performance Improvement Plan, during the first two weeks of December 2008.

When asked for comments, a Satyam spokesperson said there has been a freeze on the process. “But this is not because of the crisis the company is facing. The evaluation exercise for the year has been completed and hence the freeze. It is not related to the present situation,” she said.

Asked about the claim of some employees that the process was still on, she said the company gives the employees an opportunity to re-train under the PIP plan. “However, if they do not show adequateimprovement, they are moved out. This process can take between three and four months. What you have heard is probably related to this,” she said. The evaluation exercise generally happens in July-September every year.

Replying to a question on how many freshers had been given the appointment letters this year, she said the information would be known in the third quarter results.

Oracle India trims salaries with productivity based payments

Affects:
-All non-billable employees (those on the bench) in all centers in India
-Non-productive employees
-Employee travel costs
-Food and Snacks
-Salary cuts for Freshers

The world’s second-largest software products company Oracle is understood to have begun linking the payment of its 20,000-odd employees in India with the productive hours they spend in the company. This has resulted in salary cuts, ranging between 10 and 50 per cent across the board.

Company sources explain that if an employee is a billable resource for 15 days a month, he will be paid in full for that period while for the rest of the period, he is paid a “nominal” amount. Replying to an email query, a company spokesperson in India said: “Oracle does not comment on speculation or rumours.”

The company is also understood to have asked all non-billable employees (those on the bench) to get themselves engaged in internal projects, failing which they can explore opportunities outside the company. It is not, however, clear whether the company is asking the non-billable resources to work for outside companies as contract employees while still on Oracle’s rolls, or to use their non-productive hours to make money for themselves.

Initially implemented for the employees of Oracle Financial Services Software (formerly i-Flex Solutions), Oracle India has reportedly implemented this across all its centres in India.

Oracle India, however, has not communicated this decision to employees in writing. The team leaders and project managers in different centres have been informed about the decision orally.

“They are telling us that while many companies are aying off employees, Oracle does not want to take such extreme steps. They are saying that once things start improving, we will be back to all the usual compensation and allowances,” said a senior employee of Oracle India on condition of anonymity.

Second quarter results announced last month show that Oracle had been able to maintain its profitability despite nearly flat revenue growth. Oracle’s net income fell half a per cent to $1.27 billion in the second quarter and sales were up 5.5 per cent to $5.6 billion, lower than analyst estimates. Revenues from new software licences, which is an indicator of future sales, were down 3 per cent to $1.6 billion.

Following its acquisition of i-Flex, sources also note that there were plans to lay off all employees of that company, a decision that was scrapped following intervention of Oracle’s management. Oracle feared that the lay-off of all i-Flex employees might suggest the failure of the M&A — an area that has been mastered by the California-headquartered company over the years.

Sources added that Oracle India has cancelled employee travel costs and withdrawn free snacks and food. Despite news that the company has not stopped recruitments in India, freshers who were given offer letters for annual packages of Rs 2.4 lakh to Rs 2.5 lakh earlier are now being asked to consider packages of Rs 1.5 lakh to Rs 1.8 lakh.

Letter from Apple CEO Steve Jobs

January 5, 2009
Dear Apple Community,
For the first time in a decade, I’m getting to spend the holiday season with my family, rather than intensely preparing for a Macworld keynote.

Unfortunately, my decision to have Phil deliver the Macworld keynote set off another flurry of rumors about my health, with some even publishing stories of me on my deathbed.
I’ve decided to share something very personal with the Apple community so that we can all relax and enjoy the show tomorrow.

As many of you know, I have been losing weight throughout 2008. The reason has been a mystery to me and my doctors. A few weeks ago, I decided that getting to the root cause of this and reversing it needed to become my top priority.

Fortunately, after further testing, my doctors think they have found the cause—a hormone imbalance that has been “robbing” me of the proteins my body needs to be healthy. Sophisticated blood tests have confirmed this diagnosis.

The remedy for this nutritional problem is relatively simple and straightforward, and I’ve already begun treatment. But, just like I didn’t lose this much weight and body mass in a week or a month, my doctors expect it will take me until late this Spring to regain it. I will continue as Apple’s CEO during my recovery.

I have given more than my all to Apple for the past 11 years now. I will be the first one to step up and tell our Board of Directors if I can no longer continue to fulfill my duties as Apple’s CEO. I hope the Apple community will support me in my recovery and know that I will always put what is best for Apple first.

So now I’ve said more than I wanted to say, and all that I am going to say, about this.
Steve

HCL defers joining date of recruits, again; affects campus placements

HCL Technologies has deferred the joining month for some of its recruits from January to April, according to a person familiar with the development.

It could not be ascertained as to how many potential employees have been affected as a result of the company's decision. "These recruits were earlier told to join in January. This has been extended by three months," the official said.

The company had in October deferred the joining date for some of its recruits to January. "Our recruitment drive for 2009 is very much in progress, and it hasn't varied much from the previous years. It has been business as usual for us," said Ravishankar B, senior vice-president and head of the Talent Management Group of the company, said via e-mail.

The company had net added 7,072 employees in the four quarters ended September. The company's financial year runs from July to June. Given that HCL Technologies operates in software services and business process outsourcing sectors, a large number of employees that the company adds every quarter comprise engineers.

Most engineering colleges in India complete their academic year in July. Typically every year, campus joining at software services company is spread out over the four quarters. This is done for logistical reasons such as training needs and the consequent demand for seating.

Offers for students pursuing engineering courses, which are of a four-year duration, usually start trickling in from the start of their third year. HCL's decision to defer the date of joining for its recruits is not surprising, as it comes on the heels of its peers already having done more or less the same. The sector has been under severe pressure due to liquidity crunch in the global financial markets, currency fluctuations, cancellation of orders, rise in clients' expectations and the expected downward revision in their budgets.

Shares of HCL Technologies closed the day's trading at Rs 130.55 on the National Stock Exchange, up 3.49 per cent from Monday.

Satyam Crisis[Update]: In Merger Talks With Several Firms

Tech Mahindra: New suitor for Satyam?
If the transaction goes through, it will involve Tech Mahindra merging into Satyam, creating the third-largest IT company in the country.

The international names like HP and IBM have been in news recently for being possibly interested in buying or taking position in the IT firm, Satyam. But now, it looks like the company might have domestic suitors as well. Tech Mahindra is keen on picking up a stake in Satyam and interestingly is even exploring a merger option.

Well, there may be reasons enough for this, as the company is looking forward to a chance for graduating from a niche telecom solutions provider to a full fledged IT company and Satyam could provide that opportunity.

Well, joining hands with Satyam will help Tech Mahindra to expand into the lucrative non-telecom space like SAP, BFSI and auto and at the same time reduce its dependency on British Telecom from which it earns over 60 per cent of revenue.

MindTree, a global IT and R&D services company has announced that it denied media reports claiming that Satyam Computer Services was in talks with it for a possible merger. There is no truth in the reports and MindTree completely denies the statements made in them.

Satyam Reportedly In Merger Talks With Several Firms
Troubled Indian IT services firm Satyam Computer Systems is reportedly in talks about the potential acquisition of the company with a number of rival companies, include HCL Technologies, CTS, IBM and Accenture, according to The Business Standard, which cited “investment banking sources.”

Satyam shares have been under pressure since the company last month announced and then quickly abandoned plans to acquire a pair of construction and infrastructure companies controlled by Satyam Chairman B. Ramalinga Raju and his family. Last week, there was speculation that the list of potential suitors for Satyam included IBM and Accenture.

Satyam staff may buy shares
Faced with a potentially uncertain future, some staffers of Satyam Computers are seriously considering whether they should start buying shares of the company in the market. A move to this effect began in the Hyderabad development centres of Satyam on Monday.

IBM Layoffs: IBM too rumored to be cutting jobs this month

Rumors in the market are already talking about Microsoft and Lenovo cutting jobs this month. The latest report in the market is that IBM too is going to announce a significant job cut in their operations.

Sources say that the US based tech giant will announce 16,000 layoffs on Jan. 23. These job cuts are likely to affect IBM employees around the world. IBM currently has more than 386,000 employees worldwide. If the reports are true, IBM would be getting rid of around 4% of their global workforce.

IBM has declined to comment on these reports in the media. Alliance@IBM had this to say: “We do not have anything substantial yet. But when we start getting a lot of these kinds of rumors from specific sources, generally they come through. We’re real concerned about that and the possibility it could be true.”

TCS opens development centre in Bhubaneswar

Tata Consultancy Services (TCS), India’s largest information technology export company, today said it has opened 1,000 seats software development centre in Bhubaneswar called TCS Kalinga Park.

IT firms shifting focus from headcount to result(affects onsite and offshore head count)

Article from Business Standard:
Even while Indian IT firms are taking steps to reduce costs wherever possible, they are also making their delivery mechanisms stronger with less focus on employee addition.

“As per the traditional model, if we have 50 people working with the clients onsite, another 300 people work in offshore locations. Now, we are asking the clients to let us decide the number of people to be deployed for the project. They will explain the kind of services and levels they require, based on which we will decide our approach. We may thus deploy 10 people onsite, 20 people near-shore and 300 people offshore. And the persons deployed offshore need not be at one delivery centre, but at multiple locations,” said Suresh Vaswani, Joint CEO of Wipro’s IT business.

Firms tend to outsource work to save costs and reduce the time gap to hit the market. Increasingly, the model is shifting towards best-shoring, by which the vendors decide the location for delivery of certain components of services based on various factors such as the availability of talent and cost efficiency.

This is propelling companies such as Infosys, Wipro and TCS to sign more outcome-based price contracts, as against the earlier model, which was based on the number of people deployed in a project.

TCS, the largest IT exporter in the country, sees outcome-based pricing as part of its non-linear growth strategy rather than headcount-based pricing. The company has invested in various non-linear opportunities in areas such as software products platform, basic process outsourcing (BPO) and software as a service.

Most of the new contracts being signed by Wipro are also outcome-based price contracts. Following its acquisition of Citigroup’s captive IT arm in India, the company secured $500 million worth of contracts, a major part of which has outcome-based price components.
Infosys is vying to sign more outcome-based contracts and reduce dependence on headcount. Even though application, development and maintenance (ADM) still constitutes the largest chunk of Infosys’ overall revenue, the company is focusing on consulting and IP-based services where the margins are higher.

S Gopalakrishnan, CEO and MD, Infosys Technologies, said, “The transition to non-linear growth areas will happen slowly. We invest in the business and the future; and over time, the business changes. If you look at our business today from five years ago, more than 50 per cent of our revenues today comes from non-application development and maintenance work. It’s a significant change over the last five years, and that’s the strategy we have adopted.”

Analysts say that IT service providers prefer outcome-based pricing contracts because it rewards both the client and the service provider almost equally. “Outcome-based contracts are better from the customer’s point of view because it gives more accountability to the service provider. It is better from a service provider’s point of view because he constantly looks at innovating to deliver better service at a better cost,” said Sabyasachi Satpathy, Director & Co-founder of Mindplex Consulting, an outsourcing advisory firm.

H1-B workers in USA face stress as unemployment rises

 Nearly half a million foreign professionals are working in the country on visas, known as H-1Bs, or have applied for green cards with support from their employers, said Stuart Anderson, executive director of the National Foundation for American Policy, a policy research group in Arlington, Va. 

Many came to the United States to pursue graduate degrees and have lived and worked here for years. Those who lose their jobs in the downturn may head home or move to countries that have more lenient immigration rules. That could drive much-needed innovation in technology and engineering overseas in the years ahead, Anderson said.

Laid-off foreign workers are scrambling for temporary visas and seeking advice from immigration attorneys about how long they can legally stay in the country while hunting for jobs. 

Even some foreigners here on visas or work permits are switching employers, fearing that an unstable job during a recession could ultimately lead to a one-way ticket home or kill their chance of getting a green card. Click here for complete story from Associated Press.

Layoffs in USA: Jan 2nd update

Microsoft Layoff rumours spreading allover

Currently Microsoft employs about 90,000 people across the world and from what we're hearing, some 15,000 of those are expected to be giving marching orders come January 15th(first time in 32 yr old MSFT history). That's almost 17 percent of Microsoft's total work force, not exactly a small number. Also see '5 Reasons Why Not to Be Shocked by Microsoft Layoffs'.

Lenovo to layoff 200 employees

Lenovo Group, the world's No.4 personal computer maker, plans to lay off 200 employees at its headquarters in Beijing as it fights tough economic conditions, a Chinese magazine stated.

Motorola Inc. said Tuesday that it expects an additional $25 million in severance charges in the fourth quarter related to the 400 additional jobs cut since the company announced its cost-reduction initiative in October. The telecom equipment-maker previously said the restructuring would include laying off 1,500 workers, mainly in its mobile devices segment, resulting in pretax charges of $104 million in the fourth quarter. 

Citi execs forgo bonus

After a shockingly tumultuous year, Citigroup said Wednesday that its top executives will forgo their usual annual bonus.

In a letter to employees, Citigroup Chief Executive Vikram Pandit said the bonus structure would change for all employees. Pandit said he and Win Bischoff, the bank's chairman, will receive no bonus. Click here to read more on this.

Satyam Crisis[Update]: Founder's stake falls to 5.1 pct from 8.3

Satyam founders' stake falls to 5.1 pct from 8.3:

The promoter holding in Satyam Computer Services has dropped by over three per cent to 5.13 per cent following share sale by lenders, with whom Ramalinga Raju and family had pledged all their shares.

STEADY DECLINE

Year Promoter stake (in %)

Mar 2001 25.60

Mar 2002 22.26

Mar 2003 20.74

Mar 2004 17.35

Mar 2005 15.67

Mar 2006 14.02

Mar 2007 8.79

Dec 2008 5.13

The biggest reduction came in March 2007 when the stake went down to single digits at 8.79 per cent.

Customers continue to show trust in Satyam: Raju

Even as four of the company's independent directors have tendered their resignations, following the company's failed bid to buy his family-promoted Maytas Properties and Maytas Infra, founder and chairman of the beleaguered Satyam Computer Services, B Ramalinga Raju, said that the company's customers "continue to show a high level of trust in Satyam".

Raju stated that Satyam had also been in contact with many of its investors, and the company had taken key steps to regain their confidence.

Satyam staff keep their fingers crossed:

Source: The Hindu

HYDERABAD: Amid the raging controversies, some employees in Satyam Computer Services have embarked on a job search, while a large workforce has kept its fingers crossed on the future of the company in the wake of reports suggesting that there is a likelihood of change in management.

Senior Satyam staff in search of other jobs:

Bangalore: After the drop out of some Independent Directors, Satyam's shaky movements force many of its employees to think about new jobs and they have started approaching recruitment firms to find out similar jobs in other organizations. Though Satyam's Founder and Chairman B. Ramalinga Raju has requested the employees to stay with the firm till everything is back on track, the employees seem to be not at all willing to wait anymore and they are in search of new jobs, reported Financial Chronicle.

"We have got a number of calls in the past few days from people in the Vice-President, Senior Vice-President level and above, looking for other options," said Kris Lakshmikanth, Chief Executive Officer of Bangalore-based Head Hunters India. Not only senior level employees but also employees at lower levels have started new job searching.

Group of IT professionals at Chennai working on Wiki India

The knowledge foundation(A group of 60-70 mostly young IT professionals) at Chennai has mooted attempts to start the India chapter of the Wikimedia foundation, whose chapters are present in 13 countries around the world. Each of these chapters runs on a fund of $6 million per year, obtained through corporate endowments and individual donations. The group is working on a deadline of 2010.

5 Reasons Why Not to Be Shocked by Microsoft Layoffs

The big question isn’t, is Microsoft planning to cut 15,000 employees from its workforce? Nope, the big question is, why is everyone so shocked?

Yahoo just gave pink-slips as Christmas presents and even Google had to scale back on its staff, so why is there so much shock at the prospect of Microsoft following suit?

All you have to do is consider the facts:

1. Windows Vista was a bust, and MSFT is moving quickly to get Windows 7 to the market.

2. Windows Live Search still can’t catch Google–and failed attempts to buy Yahoo cost the company time and money.

3. Who really needs Microsoft Office, when we can either download free alternatives or, in my opinion even better, move to the cloud?

4. XBox 360, while doing better than the Playstation 3, was "pwnd" by Nintendo’s Wii gaming system.

5. The Zune? Yeah, folks just loved it when their iPod alternative froze recently–that’ll help sales.

We’re in a recession and companies are having to make drastic cuts and, unfortunately, Microsoft is not immune from this.

Satyam supporters can post a message on RamalingaRaju.com

Some of Ramalinga Raju's supporters have launched ramalingaraju.com, a site dedicated to the ‘goodness’ of Mr. Raju.

You can post a message in the website http://ramalingaraju.com/ if you wish to support Mr.Raju and glory of Satyam.

Welcome 2009

We wish you all a Happy and a Healthy New Year !