Tuesday, April 21, 2009

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Satyam: no layoffs now, but salary cuts possible

Source: Indian Express Finance and Yahoo Finance
Tech Mahindra chairman Anand Mahindra on Monday ruled out immediate job losses among the 45,000-odd Satyam employees but added that an integration team "is already in place in Hyderabad to decide on the staff strength" for the acquired company. Speaking at a press conference after the first detailed meeting with the staff of the company taken over by Tech Mahindra last week, he said, "Our immediate plan would be to retain current customers, win back businesses and retain the key 100 associates."

The plans also include finding a CFO for Satyam, said Vineet Nayyar, CEO of Tech Mahindra. "We are on the lookout for a CFO, who would be decided in the next few weeks." One of the first tasks of the new incumbent could be asking for a salary cut of at least 10% across all categories, a source close to the company said.

Chairman of the government-appointed board, Kiran Karnik, said, "One cannot say anything on layoffs now. A list of key 100 employees, which was drawn by AS Murthy, and who were responsible to get businesses even during the crucial period after Raju's disclosure, has been given to Tech Mahindra and (they) have been asked to retain them for an year."

Karnik also said that more clarity about the company's financials would be known once the 20% open offer announcement is made on Tuesday and also after the restatement of accounts.

Tech Mahindra has deposited the Rs 1,756 crore towards its 31% stake on Monday. It also put Rs 1,154 crore for public offer in a separate escrow account.

Mahindra said he aims to operate Satyam as a stand-alone unit. He said Tech Mahindra now plans to expand in other verticals, including financial services, manufacturing and healthcare. Nayyar said CEO AS Murthy and Ram Mynampati would "remain with Satyam."

Mahindra's latest acquisition could, meanwhile, trigger a possible exit of British Telecom from Tech Mahindra. Analysts say Satyam acquisition could be a risk BT unwilling to take on. A Tech Mahindra official told FE, "We do not comment on market speculation."

Richard Wright, director of corporate communications and PR, Asia Pacific at BT Global Services, said, "We constantly review our investments, but there are no initials at the moment".


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