Cost cutting
Many techies in Pune, who have been using air-conditioned cabs and luxurious coaches to travel to work, will now have to resort to public transport buses for their daily commute as cost pressures are forcing IT majors like Infosys Technologies, Tech Mahindra and Tata Consultancy Services (TCS) to opt for public transport buses that come at cheaper rates and have a better reach in the city, reported Business Standard.
Infosys Technologies has recently requested Pune Mahanagar Parivahan Mahamandal (PMPML), the local public transport body in Pune, to allow it an additional 20 buses to ferry its staffers from all over the city to its office locations in Hinjewadi. The company already has 16 PMPML buses operating for its staffers for some time.
Following suit is TCS, which also has placed a request for 13 PMPML buses within Pune city. "IT companies have been considering PMPML for transportation of staffers. We provide cheaper and safe service that has better reach and efficiency. Infosys, especially has asked for CNG buses, which we are trying to provide. We have excellent low-emission buses that would soon be deployed to ferry Infosys staffers," PMPML Managing Director Nitin Khade said.
Wipro Technologies and Tech Mahindra, too, are reportedly exploring possibilities to hire PMPML services instead of private bus operators. Infosys and TCS confirmed that they have placed requests with PMPML.
The advantage PMPML stands to get by providing bus service to IT companies is higher compensation than average running. The PMPML charges between Rs 55,000 to Rs 60,000 per month, for a single bus with a 50-passenger capacity. If a company hires a bus from a private operator, the monthly charge for a 50-seater bus goes up to Rs 68,000.
"Information technology companies have realized the advantages of ferrying employees in PMPML buses as against private buses. Hence, we are getting more and more demand for transportation services. Apart from Infosys, we expect services to TCS and Tech Mahindra companies will also begin soon," said PMPML traffic manager Sunil Gavali.
A number of IT professionals expressed satisfaction over the PMPML service. "We used to think public transport is pathetically maintained. But we are ferried in good buses and the service is really prompt," said K Sandeep, working with Infosys Technologies.
The Treasury Department is directing Chrysler to prepare a Chapter 11 bankruptcy filing that could come as soon as next week, people with direct knowledge of the action said Thursday.
The Treasury has an agreement in principle with the United Automobile Workers union, whose members’ pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing, said these people, who asked for anonymity because they were not authorized to discuss the case.
Moreover, Fiat of Italy would complete its alliance with Chrysler while the company is under bankruptcy protection.
Wipro sees a silver lining in Q1; others say recovery by 2009-end. Results for the fourth quarter ended March 31, 2009, and full-year numbers (except for HCL Technologies, which declared its third-quarter results) of the top four information technology (IT) firms reflect the pain the sector has been feeling in the past two quarters due to the global slowdown.
When compared with the trailing (October-December 2008) quarter, only HCL Technologies posted a jump in revenue (of 16 per cent). However, this was primarily due to revenue from the recently acquired Axon group. Wipro saw a dip of nearly 3 per cent in revenue, Infosys a 2.6 per cent decline and Tata Consultancy Services (TCS) a dip of 1.5 per cent (it would have been lower if the estimated $71 million from the recent acquisition of TCS eServe, former Citigroup Global Services, was not added).
The low top-line growth was primarily due to lower rise in volume and lower prices (due to renegotiation), slow decision-making and cut in IT spending by companies.
Software firm iGate today said it has put a freeze on hiring till the third quarter of the current calendar year, when it expects a bounce-back in the global economy.
"We have frozen hiring. We will not hire till the economic condition improves which we expect to happen in the third quarter of the current calendar year," iGate CEO
Phaneesh Murthy said.
Besides, Murthy is optimistic that the offshoring companies would see some kind of recovery from the third quarter of 2009.
"(The) third quarter of the calendar year, I believe, will start seeing some kind of recovery for offshore companies," he said.
As of March 2009, iGate has 6,492 employees, a net reduction of 74 employees as compared to the same period last year.
"The company has not laid-off any employee and will not lay off either. We have a total employee strength of a little over 6,000 and out of that 1,200 are on the bench," Murthy said, adding, the reduction in headcount during the quarter was mainly because of attrition.
"We are cutting down on wasteful expenditure... We are focusing on non-traditional areas like travel, power and paper consumption, for streamlining our costs to beat the
recession," Murthy said.
HCL
Software exporter HCL Technologies today said it was among the few companies which had not made any layoffs since “we anticipated the meltdown in July and applied the brakes”, CEO Mr Vineet Nayyar said. Addressing the media here today, the HCL chairman, Mr Shiv Nadar, said: “HCL’s investments in new growth engines, innovative service offerings and value centricity have helped us convert today’s challenging market environment into opportunities for growth. HCL’s leadership in the industry in having a robust growth pipeline this quarter is a proof that this strategy is paying off.”
He said the company would also repay a part of the $585 million debt it had taken for acquiring UK-based Axon last year from its current cash balance and through a fresh loan. “We had raised a debt of $585 million for acquiring Axon which is maturing in December 2009. We have a cash position of $412 million. We will pay the debt out of the cash and raise a small debt,” executive vice-president (finance), Mr Anil Chanana said.
Outsourcing
India's share of the market is set to double between 2008 and 2010, says Gartner, citing demand for cheaper options during a global recession.
According to Gartner, Indian companies' share of the BPO market is set to double between 2008 and 2010. The analyst house puts the growth down to thirst for cheap BPO spurred by the recession. North America and the United Kingdom have shown the strongest growth for Indian BPO, according to Gartner, which found the telecommunications, manufacturing, insurance and banking sectors among the keenest users of Indian BPO, with public sector and retail among the most reluctant users.
According to Gartner, the top 20 India-centric BPO companies generated US$4 billion in revenue in 2008—5 percent of the US$80 billion created by the biggest 150 business process outsourcers worldwide.
