BT Group, the UK’s largest phone company, shelved planned pay increases for executive directors as it froze salaries for all employees. The company also won’t pay any bonuses related to financial targets as the goals were missed, BT said in an annual report on its web site on Wednesday. Executive directors can still get some bonuses for improvements in customer service and on environmental and social targets, it said.
BT will make some “discretionary recognition payments” to some employees below board level, it said, adding that there won’t be any bonus payments in the global services unit.
The company on May 14 lowered its dividend after posting a fourth-quarter loss on costs to overhaul the global services division and said a further 15,000 jobs will be cut this year. It predicted today that the current economic conditions will “continue for some time.”
Bonuses won’t be out in paid in cash. Some executive directors will convert bonuses into shares while others have asked to receive no bonus at all this year.
Thursday, May 28, 2009
Layoffs in India, Satyam
TechM gets ready to lay off surplus Satyam employees
Tech Mahindra, the new owner of Satyam Computer Services, on Wednesday, prepared the ground for laying off excess staff, with the senior management making it clear that all soft options were exhausted. CP Gurnani, a Satyam board member, who addressed middle- and senior-level employees in Hyderabad made it clear that surplus staff needs to be cut, said an associate privy to the address.
The proposed lay-offs may be done within the next few weeks. Satyam has employees in four bands and is working out a formula that would see maximum lay-offs at the junior and middle levels.
Mr Gurnani’s statement comes barely a few days after Vineet Nayyar, the CEO of Tech Mahindra and now a whole-time director on the Satyam board, declared that Satyam had an excess staff of around 10,000.
The defamed founder of Satyam Computers, B Ramalinga Raju, had hired people by the droves to inflate revenue and profits in the NYSE-listed firm.
Satyam’s Australian head Nangia quits
Satyam suffered another setback in Australia after Deepak Nangia, the company’s head for the region put in his papers.
A Satyam spokesperson confirmed the exit and said the executive was serving his notice period in the beleaguered IT firm. Satyam derives almost $200 million in revenues from Australia, according to experts.
Source: TheEconomicTimes
The proposed lay-offs may be done within the next few weeks. Satyam has employees in four bands and is working out a formula that would see maximum lay-offs at the junior and middle levels.
Mr Gurnani’s statement comes barely a few days after Vineet Nayyar, the CEO of Tech Mahindra and now a whole-time director on the Satyam board, declared that Satyam had an excess staff of around 10,000.
The defamed founder of Satyam Computers, B Ramalinga Raju, had hired people by the droves to inflate revenue and profits in the NYSE-listed firm.
Satyam’s Australian head Nangia quits
Satyam suffered another setback in Australia after Deepak Nangia, the company’s head for the region put in his papers.
A Satyam spokesperson confirmed the exit and said the executive was serving his notice period in the beleaguered IT firm. Satyam derives almost $200 million in revenues from Australia, according to experts.
Source: TheEconomicTimes
Accenture
US tax plan affect: Accenture to move Ireland from Bermuda
Technology outsourcing and consulting firm Accenture Ltd plans to change its place of incorporation to Ireland from Bermuda, following an exodus of large multinational companies to Europe as the US government plans to tighten tax rules.
Accenture said on Tuesday it does not expect any material change in its financial results or tax treatment, but said Ireland will provide economic benefits. Its board unanimously approved the move.
"A member of the European Union, Ireland offers a sophisticated, well-developed corporate, legal and regulatory environment," Accenture Chief Executive William Green said in a statement.
A company spokesman said Accenture is also moving because of continued criticism of companies incorporated in Bermuda.
Several large companies incorporated in Bermuda and the Cayman Islands are eyeing a shift to Europe in search of more favorable tax treatment and other benefits. This comes ahead of US legislation aimed at tightening rules that allow firms to defer tax payments on overseas profits if earnings are plowed back into foreign subsidiaries.
Ireland is expected to benefit along with Switzerland as companies seek more hospital conditions in Europe.
Companies such as Tyco International Ltd and Tyco Electronics Ltd, Weatherford International Ltd and Foster Wheeler Ltd have also announced plans to move to incorporate in Europe.
Around 44 percent of Accenture's revenue last quarter was from the Americas region, while 46 percent was from Europe, Middle East and Africa. The remaining 10 percent was from the Asia-Pacific region.
The company said it plans to stay registered with the U.S. Securities and Exchange Commission. Shareholders will vote on the company's move at meetings within the next three to four months and the company expects the move to take effect shortly after the approval.
Accenture said it has a 40-year history in Ireland, with various clients including the Irish government.
Accenture said on Tuesday it does not expect any material change in its financial results or tax treatment, but said Ireland will provide economic benefits. Its board unanimously approved the move.
"A member of the European Union, Ireland offers a sophisticated, well-developed corporate, legal and regulatory environment," Accenture Chief Executive William Green said in a statement.
A company spokesman said Accenture is also moving because of continued criticism of companies incorporated in Bermuda.
Several large companies incorporated in Bermuda and the Cayman Islands are eyeing a shift to Europe in search of more favorable tax treatment and other benefits. This comes ahead of US legislation aimed at tightening rules that allow firms to defer tax payments on overseas profits if earnings are plowed back into foreign subsidiaries.
Ireland is expected to benefit along with Switzerland as companies seek more hospital conditions in Europe.
Companies such as Tyco International Ltd and Tyco Electronics Ltd, Weatherford International Ltd and Foster Wheeler Ltd have also announced plans to move to incorporate in Europe.
Around 44 percent of Accenture's revenue last quarter was from the Americas region, while 46 percent was from Europe, Middle East and Africa. The remaining 10 percent was from the Asia-Pacific region.
The company said it plans to stay registered with the U.S. Securities and Exchange Commission. Shareholders will vote on the company's move at meetings within the next three to four months and the company expects the move to take effect shortly after the approval.
Accenture said it has a 40-year history in Ireland, with various clients including the Irish government.
Satyam
High-profile exits continue at Satyam; Australia head quits
The exodus of high-profile employees from fraud-hit Satyam Computer Services, which got a new owner in Tech Mahindra, continues.
Deepak Nangia, head of Satyam’s Australia unit who, in his seven-year stint, brought the company a long list of clients, including National Australia Bank, Qantas and Telstra, is the latest to quit. Confirming the development, a Satyam spokesperson said Nangia had resigned two months ago to “pursue better opportunities outside the company”.
“If there is any back-up or alternative to Nangia in Australia, it will be known in a day or two,” the spokesperson said, adding there has not been any impact on the customer front with his resignation.
This is the third high-profile departure of a Satyam global head since the January revelation by its founder, Ramalinga Raju, that he had cooked the company’s books.
Earlier in February, Anil Kumar, a senior vice-president based in the US and handling the banking, financial services and insurance (BFSI) sectors, left the organisation.
Last week, three senior employees of Satyam BPO, the business process outsourcing arm of Satyam, also resigned — Naresh Jhangiani, global head (human resources), V Satyanandam (head of corporate services) and Kulwinder Singh (head of marketing — Asia Pacific).
New directors’ appointment effective from May 27
Satyam Computer Services announced on Wednesday that the appointment of four nominee directors of Tech Mahindra’s subsidiary Venturbay Consultants Private Ltd — Vineet Nayyar, vice-chairman, managing director and chief executive officer of Tech Mahindra; CP Gurnani, head (global operations, sale and marketing functions); Sanjay Kalra, president (strategic initiatives) of Tech Mahindra; and Ulhas N Yargop, president (IT sector) — will be effective as of May 27, 2009.
Accordingly, the board now comprises 10 directors, including the six directors appointed by the Central government in January, pursuant to the orders of the Company Law Board. Satyam had previously announced on May 22 that the appointment of the Venturbay directors to its board would be effective June 1, 2009.
Deepak Nangia, head of Satyam’s Australia unit who, in his seven-year stint, brought the company a long list of clients, including National Australia Bank, Qantas and Telstra, is the latest to quit. Confirming the development, a Satyam spokesperson said Nangia had resigned two months ago to “pursue better opportunities outside the company”.
“If there is any back-up or alternative to Nangia in Australia, it will be known in a day or two,” the spokesperson said, adding there has not been any impact on the customer front with his resignation.
This is the third high-profile departure of a Satyam global head since the January revelation by its founder, Ramalinga Raju, that he had cooked the company’s books.
Earlier in February, Anil Kumar, a senior vice-president based in the US and handling the banking, financial services and insurance (BFSI) sectors, left the organisation.
Last week, three senior employees of Satyam BPO, the business process outsourcing arm of Satyam, also resigned — Naresh Jhangiani, global head (human resources), V Satyanandam (head of corporate services) and Kulwinder Singh (head of marketing — Asia Pacific).
New directors’ appointment effective from May 27
Satyam Computer Services announced on Wednesday that the appointment of four nominee directors of Tech Mahindra’s subsidiary Venturbay Consultants Private Ltd — Vineet Nayyar, vice-chairman, managing director and chief executive officer of Tech Mahindra; CP Gurnani, head (global operations, sale and marketing functions); Sanjay Kalra, president (strategic initiatives) of Tech Mahindra; and Ulhas N Yargop, president (IT sector) — will be effective as of May 27, 2009.
Accordingly, the board now comprises 10 directors, including the six directors appointed by the Central government in January, pursuant to the orders of the Company Law Board. Satyam had previously announced on May 22 that the appointment of the Venturbay directors to its board would be effective June 1, 2009.
Infosys
Infosys sees good demand in India, West Asia; bags 3 deals in home market
Infosys Technologies Ltd has won three significant deals in the last five months in India, a market that has become increasingly strategic to the company.
Though details were not available, Mr Subhash B. Dhar, Member, Executive Council, said one of the deals was in the telecom sector, while another was in the manufacturing sector (private).
Infosys had formed an India Business Unit towards the end of 2007 to tap opportunities in the domestic market. The company earned about 1.3 per cent of its total revenue from India last fiscal.
Mr Dhar said the India Business Unit is doing well in terms of deal pipeline. The company is selling aggressively in markets such as India and West Asia, in addition to China and South Africa, he added.
In India and West Asia, the pipeline is good in sectors such as communication, even as the government remains a big customer, Mr Dhar said.
The company expects contribution from the ‘new engagement models’ to the total revenue to be in double-digit in the next three years.
New engagement models
The new engagement models include a shift to outcome-based pricing or cost per unit of work from per-hour/per-head pricing, offering solutions based on IP developed internally.
As a result of the economic downturn, there are budget cuts and cost sensitivity irrespective of whether a company’s balance-sheet is healthy or not, said Mr Dhar. This has prompted Infosys to give its clients cost savings. “We are not changing our rate, but have changed our cost structure by moving to transaction-based pricing,” he added.
The downturn that has affected some of the mature markets more than it has hurt emerging markets such as India has prompted companies to increase their focus on these markets. This, coupled with changing preferences of consumers who demand more Web-based distribution channels, could force companies to build newer systems or channels of engaging with customers, Mr Dhar said.
This is resulting in more and more processes getting driven into the Web sphere, and a company like Infosys could build the digital eco-system, he added.
Though details were not available, Mr Subhash B. Dhar, Member, Executive Council, said one of the deals was in the telecom sector, while another was in the manufacturing sector (private).
Infosys had formed an India Business Unit towards the end of 2007 to tap opportunities in the domestic market. The company earned about 1.3 per cent of its total revenue from India last fiscal.
Mr Dhar said the India Business Unit is doing well in terms of deal pipeline. The company is selling aggressively in markets such as India and West Asia, in addition to China and South Africa, he added.
In India and West Asia, the pipeline is good in sectors such as communication, even as the government remains a big customer, Mr Dhar said.
The company expects contribution from the ‘new engagement models’ to the total revenue to be in double-digit in the next three years.
New engagement models
The new engagement models include a shift to outcome-based pricing or cost per unit of work from per-hour/per-head pricing, offering solutions based on IP developed internally.
As a result of the economic downturn, there are budget cuts and cost sensitivity irrespective of whether a company’s balance-sheet is healthy or not, said Mr Dhar. This has prompted Infosys to give its clients cost savings. “We are not changing our rate, but have changed our cost structure by moving to transaction-based pricing,” he added.
The downturn that has affected some of the mature markets more than it has hurt emerging markets such as India has prompted companies to increase their focus on these markets. This, coupled with changing preferences of consumers who demand more Web-based distribution channels, could force companies to build newer systems or channels of engaging with customers, Mr Dhar said.
This is resulting in more and more processes getting driven into the Web sphere, and a company like Infosys could build the digital eco-system, he added.
Infosys
Infosys eyes $250 mn BP deal as BT revenues shrink
At a time when revenues from its top customer BT are dwindling, Infosys is chasing new contracts worth $100-250 million from another existing customer-British Petroleum (BP), as the company seeks to grow its revenues from almost $15 billion outsourcing market in the UK.
Europe’s third-biggest oil company-BP, which started outsourcing its back office functions many years ago, is currently fleshing out new contracts for outsourcing business application maintenance, development and support, as the oil major plans to bring down its operational costs and ensure better focus on its core business.
“BP is now engaged in discussions with outsourcing consultants in order to define the scope of new outsourcing contracts,” a UK-based person familiar with BP’s outsourcing strategy told ET on conditions of anonymity.
“BP is not entirely new to outsourcing. It currently works with Infosys apart from several others,” he added. When contacted by ET, a BP spokesman confirmed that Infosys is an existing vendor for the company, but declined to provide any more details. “Yes, Infosys is one of the number of companies in India that carries out support work for BP, but we don’t comment on any future plans,” said BP press officer Robert Wine.
In a year when customers in India’s top market of US are scaling back on outsourcing decisions, British firms will spend around $15.6 billion on IT outsourcing this year, according to research firm Ovum-Datamonitor. Meanwhile, top outsourcing customers such as BT are currently under tremendous pressure to cope with falling demand for enterprise and consumer services in the UK market, and are cutting back IT investments.
However, enterprises such as BP continue to invest in new technologies for making their business processes more efficient. “Companies in the oil sector obviously have more available funds, and they have also been among the early movers when it comes to outsourcing,” said John O’Brien, an analyst with UK-based research firm Ovum-Datamonitor.
“We find that many customers are breaking bigger, mega outsourcing contracts into smaller ones,” he said. When contacted by ET on Monday, an Infosys spokeswoman declined to comment on any specific customer. Infosys could see revenues from its top customers BT, go down from around $381 million last year to almost $300-322 million this financial year, as the UK’s largest phone company restructures its operations and scales down information technology spend in order to cope better with the recession.
According to Mr O’Brien, private sector UK companies are increasingly looking to award outsourcing contracts worth $10-50 million. “Recession is causing customers to think about driving costs out through outsourcing specific activities such as application development and remote infrastructure management,” Mr O’Brien added.
While BT continues to be the top customer for Infosys, future revenues from the phone firm has been a concern for many analysts tracking the company. “We believe that BT Global Services’ performance could have significant impact on Infosys’ growth expectations for the account in FY10,” Diviya Nagarajan, analyst at Mumbai-based JM Financial wrote in her report earlier this year.
BT, which accounted for almost 9.1% of Infosys’ revenues last year, will contribute around 6.9% of the company’s business this year, down over 2%, Ms Nagarajan said in her report.
Source: TheEconomicTimes
Europe’s third-biggest oil company-BP, which started outsourcing its back office functions many years ago, is currently fleshing out new contracts for outsourcing business application maintenance, development and support, as the oil major plans to bring down its operational costs and ensure better focus on its core business.
“BP is now engaged in discussions with outsourcing consultants in order to define the scope of new outsourcing contracts,” a UK-based person familiar with BP’s outsourcing strategy told ET on conditions of anonymity.
“BP is not entirely new to outsourcing. It currently works with Infosys apart from several others,” he added. When contacted by ET, a BP spokesman confirmed that Infosys is an existing vendor for the company, but declined to provide any more details. “Yes, Infosys is one of the number of companies in India that carries out support work for BP, but we don’t comment on any future plans,” said BP press officer Robert Wine.
In a year when customers in India’s top market of US are scaling back on outsourcing decisions, British firms will spend around $15.6 billion on IT outsourcing this year, according to research firm Ovum-Datamonitor. Meanwhile, top outsourcing customers such as BT are currently under tremendous pressure to cope with falling demand for enterprise and consumer services in the UK market, and are cutting back IT investments.
However, enterprises such as BP continue to invest in new technologies for making their business processes more efficient. “Companies in the oil sector obviously have more available funds, and they have also been among the early movers when it comes to outsourcing,” said John O’Brien, an analyst with UK-based research firm Ovum-Datamonitor.
“We find that many customers are breaking bigger, mega outsourcing contracts into smaller ones,” he said. When contacted by ET on Monday, an Infosys spokeswoman declined to comment on any specific customer. Infosys could see revenues from its top customers BT, go down from around $381 million last year to almost $300-322 million this financial year, as the UK’s largest phone company restructures its operations and scales down information technology spend in order to cope better with the recession.
According to Mr O’Brien, private sector UK companies are increasingly looking to award outsourcing contracts worth $10-50 million. “Recession is causing customers to think about driving costs out through outsourcing specific activities such as application development and remote infrastructure management,” Mr O’Brien added.
While BT continues to be the top customer for Infosys, future revenues from the phone firm has been a concern for many analysts tracking the company. “We believe that BT Global Services’ performance could have significant impact on Infosys’ growth expectations for the account in FY10,” Diviya Nagarajan, analyst at Mumbai-based JM Financial wrote in her report earlier this year.
BT, which accounted for almost 9.1% of Infosys’ revenues last year, will contribute around 6.9% of the company’s business this year, down over 2%, Ms Nagarajan said in her report.
Source: TheEconomicTimes
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