Satyam serves pink slips to 150 staff at Hyderabad centre

Written by Rachana Khanzode | Mumbai, Sep 9 | Updated: Sep 11 2008, 05:19am hrs
Close on the heels of Wipros plans to slash 1,000 people from its payrolls, and give counselling to another 2,000 underperformers, Satyam Computer Services too is understood to be pruning its workforce. The company has given pink slips to about 150 experienced employees who were on the bench from the Hyderabad centre, according to sources. More than 1,200 employees are expected to be under the companys scanner based on their performance.

As of June 30, 2008 Satyam had manpower of 51,643. Although the number of staff being retrenched is quite small now, it probably is just the tip of the iceberg, sources say. Sources reveal that the phenomena of showing the pink slip to employees in the Indian IT services companies is expected to become rampant. The reason, say insiders, is that large pipeline projects, mostly in the BFSI - banking, financial services and insurance - segment, that IT companies were expecting to come through, have been put on hold due to the recession in the US economy.

When contacted, SV Krishnan, Global Head - human resources, Satyam, told FE, As part of our appraisal process, we identify around 5% of our employees in the performance improvement category and our experience has shown that around half of them exit the system either voluntarily or involuntarily. We have concluded our appraisal process some weeks back, and we believe we are witnessing similar trends like in the past.

IT companies largely plan on their bench strength and the ratio of laterals to freshers, based on the number of projects in the pipeline. Though analysts feel that the recent employee cuts are not an indication of the crisis and is just routine management of non performers, they clearly point out that the elections season and the recession in the US is impacting their business.

Viral Thakker, director, information technology advisory at KPMG says, IT companies have indicated large hirings for the current year, but with the US elections round the corner, there is going to be a slow growth for the next three months and are planning accordingly.

Satyam plans to hire 12,000-15,000 people in the current fiscal, of which 40-45% would be freshers. However, contradictorily, some of the IT companies have delayed the admission of graduates they had recruited from college campuses by months in a bid to cut their operational expenses.

Arup Roy, senior research analyst with Gartner says, For some of the IT companies, the BFSI clients have either frozen on ramping up or postponed their IT budgets.