Satyam recalls 1,500 onsite staff

NEW DELHI: Troubled software exporter Satyam Computer Services has called back more than 1,500 overseas employees, attached to projects that are The Great Fall of Satyam Satyam: Full Coverage The crux of the scam in Satyam Top Accounting scandals Five facts about Satyam being shut down due to termination of contract by clients, said a senior company executive who asked not to be named. The first batch of 170 employees who were attached to State Farm Insurance, an Illinois-based insurance company, that terminated its contract with Satyam, has already returned to Satyam headquarters in Hyderabad, two persons close to the development confirmed. An email sent to Archana Muthappa, head of media relations at Satyam, remained unanswered for a week. The company executive confirmed that some other large clients such as Philadelphia-based Cigna Corporation, Melbourne-based Telstra, Sydney-based Qantas airlines and Atlanta-based Coca-Cola have started disengaging from the company, resulting in over 1,500 employee redundancies across Satyam’s onshore operations in the US and Asia Pacific. These four clients collectively account for more than $300 million revenues for Satyam. ET had reported in articles dated January 21 and February 7 this year that Coca Cola and Cigna had both put Satyam on notice. The employees attached to State Farm Insurance were on L1 visas and have been awaiting redeployment for the past three weeks. They are still on the rolls of the company. L1 is a non-immigrant visa that allows companies to move employees to the US for a stipulated period, but restricts such employees from changing jobs The executive said most of these employees were technical and support staff who were involved in delivery management and support to State Farm Insurance operations. “The disengagement took place in an abrupt manner. Satyam staffers were not allowed to access the computers and their belongings after termination of the contract,” he said. While the disengagements will result in forced homecoming of over 1,500 overseas employees of the company, the way they are forced to return shows that the company is failing to attract new clients overseas. Satyam has put in place a task force for 2009-10 and one of its focus areas will be cost-cutting. “There will be a lot of restructuring as business overseas has been severely impacted and hence workforce rationalisation is definitely on the cards. Also, investments in training and development and infrastructure will be brought down significantly,” said another senior executive with the company. UNITES, an organisation that works for the rights of workers in the IT sector, has received several queries from Satyam employees based in the US, the UK and Japan about how they should go about finding a solution to the current crisis. “We have advised Satyam employees in Japan to form a collective so that the JOHO-ROREN, an industrial labour federation in that country, can negotiate with the company on their behalf. This is the best way for them to get better compensation in the event of termination of contracts,” said Karthik Shekhar, secretary general, UNITES India chapter.