Syntel expected to lay off 1,500 people in India

Written by Rachana Khanzode | Mumbai | Updated: Mar 1 2009, 04:32am hrs
Sytnel, a mid segment IT and knowledge process outsourcing (KPO) firm that caters to the banking, financial servcies and insurance (BFSI), healthcare, retail and automotive sector is expected to lay off around 1,500 people from the firm's Chennai and Pune centres.

These employees constitute as much as 15% of the company's employee strength of 10,500 in India, say sources close to the development. Globally, Syntel has around 12,300 employees.

When contacted, Shrikanth Karra, global HR head, Syntel, said that there were no major layoffs this year and things were routine.

He says, "Every year we lay off poor performers during March -April. These are about 5-7% of our total employee strength and the number was around 600 people last year. We haven't laid off such a huge number this year but just 50 people that were scanned as poor performers." Karra also added the firm has transferred around 300 people from IT services to KPO as the bench strength had grown and the company wanted to reduce these numbers.

"We have transferred around 300 trainees to KPO because we have had a huge bench with us. We wanted to reduce the bench and as well provide cross training with domain skills to these employees." He adds, that the company will continue to evaluate non-performers and that they are expecting to reduce the employee count by another 50 people under the process.

However, exigencies from the business side are expected to force the management to take this step. Already, the new project order flow has plateaued, despite there being encouraging enquiries.

Karra says, says that its US clients are coming back and the firm is experiencing similar number of enquiries as it was last year. "Like the entire industry, we too are seeing an increase in adoption of off-shoring. However, decisions are being delayed by at least a few months."

Currently, banking and financial services contribute as much as 56% of the company's revenue while insurance contributes around 19%, healthcare 14% and automotive 4%.

Karra reiterates saying, "We don't project on how many number of employees we may add during the year but we would just look at the 'just in time' hiring way."

Hence, with the project order flow slowing down, the management is expected to look at downsizing the staff strength, say sources.

Currenlty, Syntel hasaround 4,500 employees in Mumbai, 2,500 in Chennai, 3,500 in Pune and its US based office has 1,500 employees.

Pink slips

Syntel has around 12,300 employees globally

Transferred around 300 people from IT services to KPO

Banking, financial services contribute 56% of companys revenue

Insurance contributes around 19%

Healthcare 14% while automotive contributes 4%