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.