The board of Satyam Computer Services will meet on Thursday to firm up a cost-cutting plan that could cover rationalisation of employees, said a source familiar with the development.
The audit-committee comprising government nominees on the Satyam board will also take stock of the progress on the restatement of accounts of the scandal-hit IT firm, the source said. Deloitte and KMPG are restating Satyam’s accounts. Satyam has 41,622 employees on its rolls, but its new owner Tech reckons that the company has an excess staff of around 10,000.
The rationalisation exercise may target employees who have not been billed for over six months now. They are set to be offered 40% of their existing salary for six months, but may eventually have to leave the firm. Non-billable employees have been targeted, as they do not bring in revenues to the IT firm.
Although no specific mention has been made on layoff plans on the board’s agenda, sources said that it’s likely to be discussed as part of cost-cutting measures. Satyam’s revenues have been under pressure, as customers snapped ties after the firm’s defamed founder B Ramalinga Raju admitted to fudging the books. The government on Wednesday said its “job is done” in handling the crisis-ridden Satyam and the company board can decide on sending back the nominee directors.
But investors cheered the stock, as the firm reported revenues of over Rs 2,000 crore and a surprise profit Rs 181 crore for the December 2008 quarter. Shareholders will be able to tender their Satyam shares in an open offer that will commence on Friday.
According to bidding conditions, if Tech Mahindra does not get the requisite 20% from the open offer, then it will be made a preferential allotment to take its total holding in Satyam to 51%.
The audit-committee comprising government nominees on the Satyam board will also take stock of the progress on the restatement of accounts of the scandal-hit IT firm, the source said. Deloitte and KMPG are restating Satyam’s accounts. Satyam has 41,622 employees on its rolls, but its new owner Tech reckons that the company has an excess staff of around 10,000.
The rationalisation exercise may target employees who have not been billed for over six months now. They are set to be offered 40% of their existing salary for six months, but may eventually have to leave the firm. Non-billable employees have been targeted, as they do not bring in revenues to the IT firm.
Although no specific mention has been made on layoff plans on the board’s agenda, sources said that it’s likely to be discussed as part of cost-cutting measures. Satyam’s revenues have been under pressure, as customers snapped ties after the firm’s defamed founder B Ramalinga Raju admitted to fudging the books. The government on Wednesday said its “job is done” in handling the crisis-ridden Satyam and the company board can decide on sending back the nominee directors.
But investors cheered the stock, as the firm reported revenues of over Rs 2,000 crore and a surprise profit Rs 181 crore for the December 2008 quarter. Shareholders will be able to tender their Satyam shares in an open offer that will commence on Friday.
According to bidding conditions, if Tech Mahindra does not get the requisite 20% from the open offer, then it will be made a preferential allotment to take its total holding in Satyam to 51%.
1 comment:
Good move for Satyam. They just ned to hold on to all their customer facing people, become aggressive on the customer engagement front, encourage all and any kind of customer interactions, and they will get there.
The excess people in India are more of a distraction, you know how IT people without workcan be!!
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