Is industry utilizing employees? Or exploiting?

Akanksha Prasad, CIOL

BANGALORE, INDIA: The recent Nasscom and other reports signal that the wave of recession is slowly receding. Companies are reportedly posting positive employeeutilization, but this is done on the cost of the employee. IT companies increased working hours, work pressure putting more stress on the employees, and in return, they were not eligible for over time benefits.

As Business Directory.com defines, employee utilization means "a method that attempts to maximize the efficiency of a company's employees".

Kris Lakshmikanth, founder CEO and chairman of Headhunters India, said that till 2007, the average employee utilization of the IT companies was less than 70 per cent. But 2008 onwards, the utilization went up to 80-82 per cent.

He said, "The factors responsible for this movement is reduction in workforce, utilization of the bench and increase in the work timings."

During the recent quarterly announcement, Wipro reported an increase in the utilization to 73.2 per cent in Q3 FY 09. HCL reported its employee utilization level moving up to 76.4 per cent in Q3 and that of Infosys came around 68.8 per cent in Q3. TCS reported the highest utilization rate of 81.1 per cent (excluding trainees) and 77.2 cent (including trainees).

Speaking to CIOL, requesting anonymity, a Kolkata-based IT professional, working in one of the leading IT companies in India, said, "Starting April 2009, our work timingswere increased by half an hour officially but one hour internally. If we worked for less than nine hours then we were penalized. But when we worked for 12-15 hours, we were not given overtime."

Lakshmikanth elaborated, "As per the reports the companies had increased the working timings by half an hour every day, which would come around an increase of two and a half hours in a week. This increase in the entire workforce can effect the total employee utilization to as much as five per cent."

Some of the IT companies reported to have increased their work timings from fifteen minutes to half an hour are TCS, HCL and Accenture.

When contacted these IT companies refused to respond, while others like Wipro and Infosys refrained from making comments saying that these timings had been around since long time.

According to them, these norms have been around for years, and it was just during the period September to December 2008 that they made compulsory office working of 9 hours 15 minutes and 9 hours 30 minutes respectively. In other words, every employee needs to work for around 8 plus one and half hour and on record, though they end up spending more than that.

Elaborating on the concept of increasing work timings, Praveen Bhadada, engagement manager, Zinnov Management Consulting Pvt. Ltd said, "For IT companies working on time and material basis, working extra hours means more revenues at the fixed salary of the employee, i.e. increased profitability. For fixed bid contracts, the work is executed faster – i.e. higher efficiency. Increased work hours reflect in increased overall productivity.

Another IT professional working in Bangalore reported that in order to show good performance and high efficiency, employees end up working for 12 hours, but still were not eligible to claim for the overtime.

She said, "Our targets were increased by double, in order to meet them under the deadlines, we worked for almost 12-14 hours. We were not only devoid of the overtime claim, but also the performance sheet did not reflect our hard work. This is the high time, when government should make strict labor laws and work timings."

Through an email, the spokesperson from the Union Labor Ministry said IT employees shall have a minimum of 48 working hours in a week but the maximum working hours have not been defined in the law and left to the discretion of the employer company. He said the department is examining the issue of working hours beyond 8 hours a day- without any extra monetary benefits.

Interestingly, none of these companies seem to bring back the gold old working experience of relief and luxury at work. Lakshmikanth opines that companies might continue with these policies for yet another six months, till they comfortably see not only recovery but growth.

Bhadada raised a very valid point that if the employee is stressed it can result in lower productivity and lower utilization as well. And this would soon become a challenge for the companies, perhaps one the reasons behind employee attrition.

Happy Times are Here Again – Indian Companies Set to Announce Pay Hikes

by sweta

After more than a year of money crunch, job loss and pay cuts; employees all over India have something to cheer about. As the corporates start recovering after the dreadful economy slowdown, the companies are gearing to reward their employees with bonus and pay hikes.

According to the latest report by Economic Times, employees across corporate India can expect a salary hike anywhere between 9 to 18 percent this year.

As per current trends, employees across sectors may get moderate to fat increments and salary hikes in the 9-18 percent range this year around. Pay-cuts, layoffs and heightened austerity measures are becoming a thing of the past, as it gets replaced with a buzz of promising bonuses.

The salary hike is expected in most companies belonging to telecom, retail, FMCG, automobiles and consumer durables sector. Last year a majority of companies had to bring down their head count. While many had resorted to a pay cut across the organisation, some had fired people in bulk.

Sandeep Chaudhary from Hewitt Associates was quoted as

“If we take a realistic look on expected salary hikes this year, it is surely going to be around 9-9.5 percent across sectors.”

He added, “Companies will focus on a more realistic approach towards salaries, as well as hiring.”

Where auto and mobile sector have been profitable and quite generous with their employees. While Maruti Suzuki is looking at a hike of 10-15 percent and an average bonus of about 100 percent this year, mobile giant Airtel is had offred an average bonus of 140-150 for junior level employees and 125 percent for senior level last year.

IT companies who have always been the highest paying sector have also decided on a good hike for its employees this year. Cognizant,SAP, VMware, Mahindra Satyam, TCS, Wipro, Infosys and Genpact are said to offer an increment of 7-15 percent at the operational level and 12-18 percent to the seniors. Wipro was among the first one to announce a hike of about 8-12 percent. At Stayam, employees can expect a hike anywhere between 8 to 20 percent and Infosys is looking at a salary hike in april even after a hike of 8% last year in October.

The job market which has been very slow for some time now has also started showing good signs lately. How do I know?

Haven’t you noticed the Naukri.com ad back on Television?

Expressway puts hope on fast lane in Bangalore

Devina Sengupta & Shwetha S / DNA

Bangalore: Hours before the longest elevated expressway to the Electronic City was thrown open to commuters on Friday, TV Mohandas Pai, human resource head of Infosys Technologies, was talking about how the unclogging of the traffic on the Hosur Road would improve the employability for companies housed in the city’s tech hub.
He said his company had lost 15,000-16,000 workers over the last 15 years because of bad connectivity. “We lost them (employees) because they did not want to commute to the Electronic City (because of bad infrastructure).”

The country’s second largest information technology (IT) company has a sprawling campus spread over 50,000 acres in the Electronic City, with over 50,000 people working out of it.

The HR head of country’s the second largest IT firm said the new flyover would cut the time taken to travel from the city to the tech hub by 30 minutes, which would translate into higher productivity and revenue for companies located there.

“It will save at least half an hour of travel time and that means for 100,000 employees of Infosys — 50,000 hours will (collectively) get saved. Electronic City will become the best place to work in India (with the opening up of the flyover). It will also reduce the stress levels and improve performance of the employees,” said Pai.

And it’s not just him, who can’t stop raving about the benefits that would accrue to companies because of the world class infrastructure.

Babu Rangaswamy, director, best shore application services — India Centre, Hewlett-Packard Pvt Ltd, felt that the expressway would improve the work-life balance of employees working from their office in the tech city. “Employees can now leverage their time at work and manage a healthy work-life balance. The elevated road will not only help reduce carbon emissions, but also set the tone of improved infrastructure in the city,” he said.

Wipro’s Joseph John said: “The number of Wipro busses ferrying the employees will get reduced, leading to less carbon emissions. Time gets saved and employee productivity will increase.”

Srikanth Paturi, a regular commuter to the Electronic City, said his travel would now be easier and quicker. “Though I won’t be using the expressway regularly, I can still use it when it’s required or during emergencies,” he told DNA.

He was, however, sceptical on whether the new expressway would completely end the traffic nightmare that the Hosur Road has become.

“The traffic jam problem near the Silk Board junction will persist as all the vehicles will arrive there and get clogged. Though we will be able to reach the Silk Board from Electronic City easily, we may get stuck in a jam after that,” said Paturi.

Techie Anish Ratnam, a resident of Frazer Town, however, said that the expressway would cut the travel time by more than half.
Anand Rao, a software professional with a tech firm in the Electronic City, believed the high toll fee could be dampener. “I feel the toll fixed is quite high. Most of us work only for five days in a week. It’s not worth paying Rs900 per month. We would rather take the alternative routes (than pay the toll)."

TCS, Wipro, Infosys, loosen purse strings to retain staff

BANGALORE: Nitin M, a techie in his 30s in IT capital Bangalore, still feels a chill run down his spine as he recalls the roller coaster ride his professional life took during the economic slowdown last year. In the pre-slowdown days, he belonged to the country’s most pampered workforce, when jobs were easy to come by and perks were splashed. The storm came soon enough. The smiles thinned out, and the number of colleagues he shared his expansive office space with too began to diminish. Sodexo coupons were cut, easy rides in private taxi cabs were replaced with journeys in crowded company buses. And salary hikes were a thing of the past. As a new decade unfolds, the wheel has come full circle. Nitin, who has recently landed a job with another IT company, said his previous employers had slashed increments during the recession. “Now, the company is giving a 40% hike to hire former employees back.”

Salary hikes in the offing IT employees and HR experts expect many companies such as Target, Cognizant, SAP, VMware, Mahindra Satyam, TCS, Wipro, Infosys, Genpact, Oracle, MindTree and Accenture to offer a pay hike of 7-15% at the operational level and 12-18% at senior levels. Abhinav Krishnan, an employee at VMware, the largest maker of software that lets computers run different operating systems, recently received a salary hike. This came as a big relief to him as he is his family’s sole breadwinner. “The company I worked with previously did not give me any hike. So I moved out, and my salary has now doubled,” says this 26-year-old employee, who was earlier with one of the world’s largest technology companies. Similarly smiles are back on the face of the 27-year-old techie working at advisory services firm Ernst & Young. He had planned to buy a car and a bigger house last year, but these dreams wilted away in the economic slowdown. “This year, I am planning to buy both. The company has announced a salary hike and a bonus of 7-10%. I am now in a better position to get a loan,” he said.

Attrition levels up
The improving market sentiments have also resulted in a rise in attrition levels, as companies have started to pay premium packages to hire skilled hands from other companies. An Infosys employee said attrition levels have gone up and most employees were going to rival firms like Tata Consultancy Services and Wipro, which are offering a 40% hike in salaries. “We are expecting a salary hike of 8% this April,” he said. He said that during the tough times, they had to put in six hours of work, which was considered a full day. “Now, spending 3.5 hours is considered to be a full day,” he said. Due to the economic meltdown, issues related to the work environment, employee benefits and innovative programmes were put on the backburner. Companies were not too transparent in informing their employees about key decisions taken in the organisation. Many employees said that some companies are exploiting the situation in the name of recession. Ajit Sivaraman, a 26-year-old techie, shifted to Tesco — one of Britain’s largest retail groups — to do the IT-related work there. The company offered him a 60-70% pay hike. He is now planning to buy his own home with an investment of around Rs 20-25 lakh. “I used to earn between Rs 1 lakh and Rs 3 lakh. Now I get Rs 3-5 lakh in the new job,” he said. He said his previous organisation even changed the cab facility to bus service for morning shift employees and offered staffers Rs 75 per day, if anyone wanted to come on their own. “It costs me Rs 200 per day to commute. They even cut our Sodexo meal card,” he said.

Talent reward programme
A Satyam professional said salary hikes were based on a model called ‘Smart’, with employees coming under the so-called ‘S-band’ receiving a salary hike of 20%, while those under the T-band received an 8% salary hike. He was expecting hike of 15% in April and plans to buy some property. “kI was earlier looking to move out as there was a lot of uncertainty and attrition levels were high. I don’t have plans to move out now,” he said. C Mahalingam, executive vice-president and chief people officer at offshore product firm Symphony Services, said his company was giving a salary hike of 7-8% to their employees and 8-9% hike to its top talent. “Companies are now hosting lunches and dinners at five-star hotels for their top talent. But the fun-and-frolic approach to keep employees happy may not come back in the near future,” he said. Mid-sized software and R&D services firm MindTree said it is focusing on a good communication network and is keeping employees informed about every development. “Employees do not expect free lunches and gifts. But they want to be treated as professionals, and their seniors to be more approachable,” says MindTree chief HR Puneet Jetli. IT services firm MphasiS has announced a recompense bonus for its staff which the company feels is possibly an innovative compensation model as it is based on the company’s performance and employee’s individual performance. “We have given a recompense bonus of 25% for the highest performer. For good performers, the bonus can be 15-25% higher than the average pay hike,” MphasiS chief human resources officer Elango R said.

According to Ajit Isaac, MD & CEO of IKYA Human Capital Solutions, many companies are planning a 12-18% fixed salary hike for senior employees and 5-15% salary hike for employees at the operations level. But captive centres, which were earlier paying lucrative salaries, won’t be able to keep the pace. “This is because outsourcing margins and billing rates are under pressure as a major chunk of outsourcing contracts are going to third party vendors,” he said. An IT employee at Keane, a technology services company, said she has received a salary hike of 10-12%. “Last year, there were lot of structural changes to combat the recession,” she said. The New Year has certainly brought some smiles back.

Satyam Computer basks in IT glory

Shares of Satyam Computer are seeing a renewed burst of activity. Probably, strong quarterly numbers from Infosys Technologies could have raised expectations from other leading IT services companies as well. On Thursday, a US-based investor is said to have bought close to 30 lakh shares. Some of the bull operators too are said to be steadily building up long positions at the counter. Dealers tracking the counter say the rise in the stock price from hereon may be a bit gradual, since many players who are tired of holding on to the stock may decide to cash in. The stock had touched a high of Rs 128 in September last year, but has been moving in a narrow band ever since. On Thursday, the stock closed at Rs 120.85, up 1.2% from the previous close. On the BSE, 1.23 crore shares changed hands, with roughly a fourth of it resulting in delivery.

Infosys sacks techies for 'unethical behaviour'

MYSORE: Infosys Technologies has sacked a software engineer, Abhishek Gupta, for making a hoax call to budget carrier GoAir at Delhi airport Oct 25 to avoid missing his Bangalore-bound flight, a company official said here on Tuesday.

"Yes, we have sacked Gupta for indulging in unethical behaviour. We have a very strict code of conduct. We take strict action against those who do not adhere to it," Infosys board member and head of HRD and education and research T.V. Mohandas Pai told media.

The 25-year-old Gupta caused a bomb scare by telling GoAir staff that there was some suspicious object on the plane after he failed to convince them earlier to delay the flight.

"He thought the hoax call will delay the flight and he could reach the airport in the meantime to catch the flight," a Delhi police official said after Gupta was taken into custody and jailed.

The IT bellwether has also suspended another software engineer, Pallav Chakraborty, after he was arrested with his wife Sinchita by the Bangalore police Dec 29 for allegedly torturing their 15-year-old domestic maid.

"Though Chakraborty joined the company 15 days before his arrest, we suspended him after an inquiry into the child abuse, which is a very sad thing to have happened," Pai said.

As the police were investigating the case and the accused was in the judicial custody, Pai said the company would take strict action against him after the law had taken its course.

"We do not condone such acts. We are saddened by such an inhuman act. We have 109,882 employees on rolls. I think as we grow bigger, we are not the sample but part of the universe," Pai said on the margins of a media briefing on the company's financial performance for the third quarter.

Pallav and Sinchita, who hail from Kolkata, brought the girl from West Bengal for household chores.

A social organisation rescued the girl after raiding the house following a tip that a young domestic maid was in a bad state with injuries on her back and cut marks on her lips.

The police did not name the victim to protect her privacy and not to hamper investigation.

The company was also forced to suspend another engineer, Krishnamurthy, working at its Mysore development centre, after the police arrested him Dec 3 on the charge of molesting a French woman.

"Krishnamurthy remains suspended as police inquiry is still on. We will not spare anyone if (his or her) behaviour is not in line with our code of conduct," Pai said.

The three incidents occurred at a time when the company was recovering from the impact of a year-long global tech meltdown.

Protecting margins a big worry for IT firms

BANGALORE: India's leading software services companies are set to report a fall in profit margins for the last quarter due to a firmer local, though demand for outsourcing is improving in a global economy on the mend. The country's $60 billion sector, which manages complex computer networks to maintaining technology operations for clients such as General Electric and Citigroup, is back to its hiring ways and is also boosting salaries. "All the negatives in the world economy are not out of the system, but the confidence level in the IT sector is better now compared to the beginning of last year," said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services. "The companies are now expected to come back on the growth path, but the key challenge is the currency rate."

A global recovery, recent deal wins and stable prices have brightened the outlook for Tata Consultancy Services and Infosys Technologies, India's top two IT exporters, after the global recession hit the sector last year. The rupee, which rallied to a 15-month high on Thursday, surging wages, and intense competition from global firms such as IBM, Accenture and Hewlett-Packard are seen as key risks for the sector. The rupee is set to rise another 4 percent this year on top of its 4.7 percent increase last year, with gains driven mainly by inbound portfolio investment, according to a Reuters poll. Indian tech firms are a magnet for thousands of young jobseekers with their sprawling campuses offering pizza and Subway outlets, golf courses and fitness centres to retain employees.

The software services sector gets more than half its revenue from the United States but companies are furiously expanding in Asia Pacific, Latin America and the Middle East to reduce dependency in the market and boost growth. Infosys, India's No. 2 software exporter, a trendsetter in the showpiece industry, kicks off the earnings parade on Tuesday, followed by sector leader Tata Consultancy on Friday and third-ranked Wipro on Jan 20. Infosys is expected to post its first year-on-year drop in October-December profit, as wage rises, a stronger rupee and higher sales and marketing costs dent margins. Valued at $32 billion, Infosys, which had previously frozen salary hikes and promotions for this fiscal year, said in October it would raise pay by an average of 8 percent this year for its employees in India. Markets will be keen on the company's comments on business and pricing trends, hiring and IT budgets of its overseas clients in 2010. Last month, Accenture reported a fall in first quarter earnings and gave a sales outlook for the current quarter that was weaker than analysts' expectations.

MARGIN PRESSURES
Infosys expects revenue growth in the fiscal year starting in April to be better than this year as a recovery in the global economy spurs investments by its clients, a senior official told Reuters last month. Consultant Gartner said major British and U.S. firms are focusing on a return to revenue growth in 2010 over cost-cutting, and information technology was central to their recovery strategies. Brokerage Angel Securities said Infosys profit margins are set to drop 245 basis points in Oct-Dec from the preceding quarter due to a 3.4 percent rise in the rupee and salary hikes. Tata Consultancy and Wipro should report margins fell 62 basis points and 38 basis points, respectively, it said. In the quarter, Tata Consultancy shares gained 21 percent and Infosys rose 13 percent versus a 14 percent jump in the sector index and a 2 percent rise in the broader market.

Telangana issue forces IT firms to eye neighbours

Political disturbance over the demand for a separate Telangana state is forcing information technology companies to shift. The process to shortlist office space in neighbouring states, like Tamil Nadu, is underway.

"Six companies, including top five in IT and operating in Hyderabad, want to shift before the end of January," Chennai-based Shriram Properties Managing Director M Murali said.

Software exports from Andhra Pradesh are projected to touch Rs 35,000 crore in 2009-10, and IT companies like Tata Consultancy Services , Infosys , Wipro , Tech Mahindra and HCL are present in Hyderabad.

"Besides Chennai, we have received enquires for leased properties in Visakhapatnam. All want office space for at least three-five years," Murali added.

"Two IT majors have approached us for 100 apartments on bulk lease, besides IT premises," said Chitty Babu, chairman of Akshaya Homes, a Chennai-based developer.

The IT department of Tamil Nadu confirmed that Chennai had received enquiries from Hyderabad-based IT companies. The Electronics Corporation of Tamil Nadu (Elcot), the nodal agency for IT in the state, develops special economic zones.

"We have been approached by IT companies, which are currently enquiring about availability of space in the state," an IT department official said. He added that Elcot was planning to organise roadshows -- from Hyderabad to begin with -- to promote IT in Tamil Nadu.

The move is bound to have its impact.

"About 15-20 percent of the 60,000-140,000 professionals employed globally by Tech Mahindra, Patni Computers, Satyam Computer, HCL, Wipro, Infosys and TCS globally are based in Hyderabad," P Phani Sekhar, fund manager (research arm), Angel Broking said.

J A Chowdary, managing director of NVidia Graphics India and president of The Indus Entrepreneurs, Hyderabad chapter, said if the decision on Telangana was prolonged, the IT companies would suffer. "Though we have requested the political parties to ensure law and order, students are going in for violent agitations by not allowing buses to ply and creating problems for people to reach offices."

TCS, Infy, Wipro losing contracts to Emerging rivals

BANGALORE: Emerging nearshore rivals, including Ness Technologies of Israel, CPM Braxis of Brazil and Mexico-headquartered Softtek are increasingly becoming attractive for top outsourcing customers such as GE, Citibank and several others seeking to work with local, specialised vendors instead of sending all projects to offshore locations like India.

At a time when India’s top tech firms Tata Consultancy Services (TCS), Infosys and Wipro are redefining their positioning as global services providers by growing their presence in the emerging markets of Latin America, Eastern Europe and Asia, they face stiff competition from these newer rivals.

“For many customers who already have significant presence in offshore locations like India, it’s a risk diversification,” said Jimit Arora, research director of outsourcing advisory firm Everest Group. “Some customers having 70-80 per cent of their offshore resources in India are realising that they need to look at the third category of suppliers that are local and niche,” he added.

Over the past two years, companies such as CPM Braxis, EPAM Systems, Ness Technologies, Softtek, Merchants and Spi Global have emerged as stronger rivals for Indian tech firms, especially while bidding for an outsourcing contract being fleshed out by a ‘first-time outsourcer’.

“When it comes to new business from the first-time outsourcers, these local suppliers may be gaining at the expense of multinational and offshore rivals,” added Amneet Singh, vice-president, global sourcing at the Everest Group. Mr Singh, along with Mr Arora, researched the six emerging suppliers and found that they have been growing at an average compounded growth of around 25% annually during the past few years.

Brazilian firm CPM Braxis, for instance, which counts GE, ABN Amro and Whirlpool as clients, reported revenues of around $567 million in 2008. One of the top four Brazilian banks, Bradesco, is also among the biggest customers for the company.

“Some customers, including Bradesco, would rather work with a local supplier, there’s nothing wrong. For large MNC customers, offshoring continues to be a priority,” said a senior executive at one of the top Indian tech firms. He requested anonymity because his company is currently in a financial silent period.

While these emerging outsourcing rivals are not yet in the big league of mega, multi-year contracts, they are still able to gain business because of their niche and local market expertise. On an average, these companies are able to win contracts worth $2-5 million in annual contract value.

Meanwhile, for Indian tech firms seeking to grow their base outside their home country, these emerging companies also offer potential M&A opportunities.

“Many emerging companies we spoke with believe they can become $1-billion company on their own. However, some admitted that they would be open to inorganic opportunities too,” said Mr Arora.

Indeed, emerging service providers in countries of Brazil, Argentina and Mexico such as Globant, which counts Adidas, Linked IN and Citi among its top customer and has around $100 million in revenues, are increasingly being approached by some Indian tech firms, officials told ET on condition of anonymity.

“We have had discussions with both Softtek and Globant, but I cannot comment any further,” said a senior executive at one of the tech firms exploring inorganic growth route for expansion in the emerging markets. Experts believe such fast-growing firms always make a good acquisition target.

“Given where these companies are in terms of their size and capabilities, they do make good acquisition targets for Indian companies,” agreed Mr Singh.

What makes these firms really attractive is their strong presence in some of the fastest-growing markets for software services. For instance, Ness generates about a third, or $170 million, of its revenues from Eastern European markets of Czech Republic, Slovakia, Hungary and Romania.

“One of the more interesting prospects in this region relates to government initiatives, particularly as it relates to a ‘digitisation’ grant for the EU worth more than 10 billion euro, with ‘must use’ clauses by 2013,” observed James Friedman, analyst at the financial broking firm Susquehanna International Group (SIG).

“Ness is competing actively for this work in a number of regions, and expects Eastern Europe may improve by H2 of 2010, still targeting $300 million from this region by 2012,” he added.

Infosys set to get K'taka contract on T&D losses

The Rs 380-crore tender is part of the Accelerated Power Development and Reform Programme of the central govt.

Infosys Technologies, India’s second largest software services company, is close to winning a Rs 380-crore contract from the Karnataka government’s electricity supply companies, aimed at stemming transmission and distribution losses.

The contract is being awarded as part of the Accelerated Power Development and Reform Programme (APDRP) initiated by the central government.

Industry sources indicate that Infosys has emerged as the lowest from among 11 bidders, including Wipro, TCS and KLG Systems. A company spokesperson declined to comment.

Indian software service vendors are all vying for a piece of the Rs 10,000-crore of contracts under the APDRP, more so as this is a programme which could be expanded later. TCS and HCL, Infosys' big rivals, have won similar contracts on addressing T&D losses in other states.

Infosys has been stepping up its India presence during the past 18 months, setting up a separate India business unit. It has so far bagged three major projects in the government sector. Earlier, the company had won a project to set up and manage a central processing centre for the income tax department and one from the ministry of commerce to develop an eBiz portal to help provide one-stop services to industry.

The company has also bagged a pilot project to roll out an Integrated Coach Management System for the Indian Railways. Though the initial (pilot) project cost is small, its success will determine the schedule on when the railways will go for floating the final tender for the project, estimated to be Rs 210 crore.

Infosys Opens Development Centre in Brazil

Infosys Technologies has opened its wholly owned Brazilian subsidiary - Infosys Tecnologia Do Brasil Ltda. The first development centre of this subsidiary is in Belo Horizonte, the third largest metropolitan area in Brazil after Rio de Janeiro and Sao Paulo, with a mature Information Technology (IT) services and Business Process Outsourcing (BPO) ecosystem and an established talent pipeline.

This new centre will offer Infosys' complete suite of services to Infosys' Brazilian clients and Brazilian subsidiaries of global customers.
Infosys has been present in the Latin American market since the creation of the company's Mexican subsidiary - Infosys Technologies S. De R.L. De CV, in 2007. The center in Belo Horizonte is Infosys' third development center in Latin America following the recent opening of Infosys' second center in Monterrey, Mexico.

The company has been investing and strengthening its position in Latin America to expand its footprint in the region and also to leverage the near shore advantage of similar time zones for global clients. The two development centers in Mexico service 32 clients and employ 357 professionals.

CEO and MD of Infosys, S Gopalakrishnan said, "Brazil is the largest IT and BPO services market in Latin America, with the eighth highest IT and BPO services spend in the world. The growth forecasts for the IT-BPO sector in Brazil have remained high despite the global economic crisis. Along with our centres in Mexico, our presence here will strengthen our ability to address both Spanish and Portuguese speaking markets in Latin America, driving our business growth in the region."

Infosys has appointed Puneet Gill as the head of this development centre. Gill has been with Infosys since 2003 and headed BPO operations in Mexico earlier.

Dheeshjith V G, head of new markets and services, Infosys said, "We are fully committed to Brazil and will be leveraging our presence there to offer our full range of IT Consulting, IT services and BPO for our global and Brazilian clients across all industries including banking, financial services, insurance, manufacturing, retail, distribution, telecom, energy, resources and other industries."

Infosys to make China biggest development centre outside India

LOOKING EAST.

Mr Kris Gopalakrishnan

K. Giriprakash

Swetha Kannan

Bangalore, Dec. 11

In a far-reaching move, IT bellwether Infosys Technologies has decided to make China its biggest development centre outside India.

“China will be our biggest development centre outside India while the US will be the largest market in terms of revenues and India will remain the largest in terms of physical presence,” the Infosys Technologies Chief Executive Officer and Managing Director, Mr Kris Gopalakrishnan, told Business Line.

For the quarter ended September 30, 2009, 9.7 per cent of Infosys' revenue was generated from the rest of the world which includes all regions except North America, Europe and India. North America contributed to 65.9 per cent, Europe 23.2 per cent, and India 1.2 per cent. Infosys does not give country-wise break up of revenues.

As Infosys takes a big leap forward into the next decade, it wants to deepen its geographical presence, said Mr Gopalakrishnan. One of the major reasons for developing the China centre was because of the huge potential it sees there and also the quality of talent pool available there.

Currently, Infosys has two development centres in China: Shanghai and Hangzhou, with a total of 1,258 people working there. The centre delivers BPO and IT services to clients in the US, Europe and Asia. Mr Gopalakrishnan said that the company is also working closely with the Chinese Government to tap and subsequently nurture the IT talent pool there.

“Our China Development Centre has grown in the last one year... We have been expanding our delivery capability in horizontal services such as enterprise solutions, independent validation services, and product engineering as well as investing in contextualising our banking solution product, Finacle, for the Chinese market,” he said.

He added, Infosys will also continue to invest and expand in markets other than China such as Poland and other European countries and Mexico, the Philippines and Brazil, because of the advantage they offer in terms of round-the-clock support to local language support.

Global consultancy firm, KPMG's Executive Director and Head of IT advisory, Mr Kumar Parakala, told Business Linethat Infosys' move showed its visionary strategy for its company. "By 2020, it is expected that China will have the largest English-speaking population in the whole world. Hence, China will have the talent pool needed to support the IT sector," he said.

He said more and more IT multinationals are using the global delivery model for their businesses with presence in all the right places including China. "Therefore, Indian MNCs can get significantly disadvantaged if they do not have a presence in China," he pointed out. He said if Indian companies start setting up their centres in China, firms in China will do the same leading to both the countries leveraging each other's strengths.

Wipro, Microsoft, Intel, Infosys get maximum H-1B visas in 2009

By Moira Herbst
Even as job losses in the US mount, employers have stepped up the hiring of skilled workers from abroad, according to data from the US Citizenship & Immigration Services. The acceleration in recent weeks has put companies close to exhausting the 65,000 visas allotted each year for foreign hires under what's known as the H-1B program. Some 61,500 visas had been used as of Dec. 8, and the last visas are likely to be claimed within weeks. Once that happens, companies won't be able to use the program to bring in additional workers until October, the start of the government's fiscal year.

"The numbers are surprising, considering the state of the economy," says Ron Hira, associate professor of public policy at Rochester Institute of Technology. "With 15.4 million people unemployed in the U.S., employers should be able to find qualified workers here." The H-1B program allows employers to sponsor skilled workers from overseas for up to three years, with the possibility of extending for additional years.

DECLINING NUMBERS

The mix of companies receiving work visas is changing in ways that could dull at least some criticism of the program. In past years outsourcing companies, including many based in India, have received a substantial chunk of the visas. That's led opponents to charge that the program was being used to send American jobs abroad, since many H-1B employees train at client sites in the U.S. and then rotate back to their home countries to handle similar tasks. But the number of visas received by many non-U.S. outsourcers is declining. Of the top 200 recipients of H-1B visas in fiscal 2009, ended in September, offshore outsourcers got about 22%, or 5,663, down from 38% in fiscal 2008.


Non-U.S. outsourcers still claimed 6 of the top 10 places in fiscal 2009, although the numbers were off for the largest operators. India's Infosys Technologies (INFY) topped the list in fiscal 2008, with 4,559 visas, but last year got only 440. Wipro (WIT) was the largest visa recipient in 2009, with 1,964, down from 2,678 in 2008. Sridhar Ramasubbu, Wipro's chief financial officer for international operations, says the drop is the result of lower demand caused by the recession and changes in the company's workforce. "We're now operating in 58 countries," he says.

U.S. companies have become more active in the program. Of the top 200 recipients in 2009, American businesses accounted for 49% of the visas, up from 43% in 2008. Microsoft (MSFT) was No. 2 on the list with 1,318 approvals, while Intel (INTC) ranked No. 3 with 723. The chip giant says it's using the visas to recruit for high-skill posts in software and component design. "We only use visas for job categories with a [domestic] skills shortage," says spokeswoman Lisa Malloy.

With the Obama Administration struggling to create jobs, politicians are debating whether the visa program needs fundamental change. On Nov. 19, Senators Bernie Sanders (I-Vt.) and Charles Grassley (R-Iowa) introduced a bill to bar major companies that lay off U.S. workers from hiring foreign labor through H-1B and other programs. The legislation, which faces significant hurdles, would apply to companies that have cut 50 or more employees within the past year. "We have a responsibility to ensure that companies do not use the temporary guest-worker program to replace American workers with cheaper labor from overseas," says Sanders.

Herbst is a reporter for BusinessWeek.

Infosys likely to offer 13,000 jobs on campuses

BANGALORE: Infosys Technologies, the country’s second largest IT services exporter, is likely to make 13,000 campus offers to fresh engineering graduates who are expected to join during the course of fiscal 2011.

Interacting with mediapersons here on Wednesday, Nandita Gurjar, senior VP, Infosys said that they have already started going to campuses in about 700 engineering colleges. Infosys had made 20,000 offers to engineering graduates for the 2009 fiscal, though only around 75-80 % of the students actually join the company.

The Indian IT services industry has discontinued the earlier practice of selecting the students a year before they complete their graduation and is now visiting colleges in the final semester itself. According to the Infosys official, they would be closing the 2009 fiscal with around 18,000 freshers and 3,500 experienced hires and it is expected that the same hiring numbers is likely for the coming fiscal.

The compensation package for the students coming into Infosys from the next fiscal will be same as last year.
The campus offers for the Indian IT industry had run into certain rough weather during the FY09 with certain companies delaying the entry of these students and in some cases putting them on a different stream of work.

Infosys Employee Ridiculed For Celebrating Christmas and Thanksgiving

There is a school of thought that maintains that non-Western peoples are simply not capable of sustaining—or assimilating to—the civilization of the West, that “East is East and West is West,” as Kipling put it, and never the twain shall meet.
Sam Francis, 2002

Francis correctly portrayed Kipling’s realism about multiculturalism but nobody can say that Promila Awasthi, an India-born American citizen, didn’t try to beat the odds to assimilate into our culture. Awatshi wanted to celebrate Thanksgiving and Christmas but was hassled by her bosses at the Indian owned bodyshop Infosys. Awashti’s bosses at the Freemont, California branch of Infosys were Indian nationals who routinely ridiculed her and her family for wanting to take part in those great American traditions.

The NBC Bay Area website gave the following account of the story:

Infosys management routinely disparaged Americans, including Mrs. Awasthi, as not having “family values,” and stated that layoffs in America are good because the jobs will be outsourced.

Infosys management ridiculed Mrs. Awasthi for celebrating the American holiday of Thanksgiving, telling her that she should not celebrate Thanksgiving because she is Indian, and that therefore she must work on Thanksgiving Day.

Infosys management ridiculed Mrs. Awasthi’s children for celebrating Thanksgiving, and called them “ABCD” short for “American-Born Confused Desi,” and “IBCD” short for “Indian-Born Confused Desi,” insulting terms used to criticize people of Indian ancestry who are Americanized.

Infosys management ridiculed Mrs. Awasthi for celebrating Christmas, saying that “we” do not celebrate Christmas, and that she should not celebrate Christmas. Infosys management repeatedly discussed the quality of Mrs. Awasthi’s work by explicitly commenting on their expectations for “a woman your age.”

The India Herald revealed more details of the story:

The complaint alleges that while working at Infosys, Mrs. Awasthi was routinely harassed by Infosys management, nationals of India, on the basis of her being an American of Indian ancestry and national origin, and on the basis of her age and gender. For example, the complaint alleges that:

· Infosys management ridiculed Mrs. Awasthi for celebrating Thanksgiving, telling her that she should not celebrate Thanksgiving because she is Indian, and that therefore she must work on Thanksgiving Day.

· Infosys management ridiculed Mrs. Awasthi’s children for celebrating Thanksgiving, and called them “ABCD,” short for “American-Born Confused Desi,” and “IBCD,” short for “Indian-Born Confused Desi,” insulting terms used to criticize people of Indian ancestry who are Americanized.

Awasthi is fighting for her right to be a fully assimilated American — and to get paid overtime if she is forced to work on those holidays, as required by California state law. On Novermber 23 Awasthi filed a lawsuit in Alameda County Superior Court against Infosys.

Infosys, Cognizant and UST Global amongst those shortlisted by Wal-mart

MUMBAI, Dec 4 (Reuters) - Wal-Mart Stores Inc (WMT.N), the world's largest retailer, has picked three IT vendors including India's Infosys Technologies (INFY.BO) for multi-year contracts worth over $600 million, the Business Standard said.

The other vendors are Cognizant Solutions (CTSH.O) and UST Global, the newspaper said, citing an unidentified source close to the development.

Initially the three vendors are expected to earn 2.5 billion to 3 billion rupees ($54 million-$65 million) each annually, which will rise as Wal-Mart increases outsourcing more work.

Infosys and Cognizant, which will provide application development and support, are expected to get a larger share of the contract, the paper said.

UST will be responsible for testing these applications, it said.

"What is more important is that these three vendors have now got a ticket to be in the club of Wal-Mart's list of preferred vendors which will help them in growing this account in the long run," the paper quoted the source as saying.

"We do not comment on market speculation," a spokeswoman for Infosys told Reuters.

Wal-Mart's media relations director, John Simley, said in am emailed reply to the paper: "We have a large and growing business and productive relationship with many Indian companies. We do not comment on speculations about the nature of any business relationship."

Infosys to Nearly Double Work Force in U.S. Market

BANGALORE, India—Infosys Technologies Ltd. plans to nearly double its work force in the U.S. and remains on the lookout for acquisition targets in Germany, France and Japan, its chief executive said.

India's second-largest software exporter by revenue after Tata Consultancy Services Ltd. is planning to hire 1,000 employees in the U.S., Chief Executive S. Gopalakrishnan said in an interview.

The company, which had 1,200 U.S. employees as of March 31, had said in April it would hire more staff there. As of Sept. 30, it had a total of 105,453 employees.

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Infosys CEO S. Gopalakrishnan, pictured in April, said the company plans to increase its work force in the U.S.

Infosys gets about 66% of its revenue from the U.S. market. The company joins other Indian software exporters in gradually stepping up hiring to prepare for an expected increase in outsourcing deals as technology spending makes a modest comeback in developed nations.

The company has been trying to reduce its U.S. exposure by increasing its operations in Europe and Asia, which account for about 23% and 10% of its revenue, respectively.

"Ordinarily we look at a company of 10% of our size" for acquisition, Mr. Gopalakrishnan said, adding that a prospective target would have $300 million to $500 million in annual revenue.

He didn't provide details on the business segments it is targeting for acquisitions. Mr. Gopalakrishnan had previously said the company was looking to acquire firms offering services to the health care and utilities sectors to boost its consulting and outsourcing businesses.

Mr. Gopalakrishnan said Infosys's revenue growth in the next fiscal year, starting April 1, will be driven by new outsourcing contracts. But for this fiscal year, "we are looking at almost zero-percent growth," he added.

In October, the company had forecast $4.60 billion to $4.62 billion of revenue for the current fiscal year, down 1% to 1.3% from a year earlier.

IT majors worried about cascading effect of Dubai crisis

MUMBAI/BANGALORE: As Dubai World, the emirate’s investment firm seeks more time to repay almost $60-billion debt, India’s top tech firms fear
that the once lucrative West Asia market for outsourcing can enter a prolonged recession and customers in other top export markets of the US and Europe may exercise more caution while making outsourcing decisions.

Tata Consultancy Services (TCS), Infosys Technologies, Wipro, HCL and Patni Computer Systems are among Indian tech firms serving telecom, banking and other customers in the West Asia region. Dubai, the biggest commercial hub in the region saw home prices plunge by nearly half from 2008 levels, reflecting the worst real estate slump during the global recession, according to Deutsche BankAG.

“Global confidence is coming back. We were hoping for more spends. But now the confidence of our customers is shaking. I expect they are going to be a bit more cautious about spends and will not open up so much. Budgets were getting firmed up in December—clients will now relook at the whole thing,” said a senior software executive with one of the firms that was looking at the West Asia and Africa as a growth markets. Publicly, though, few firms are willing to admit to these worries.

While Wipro counts Qatar Petroleum and Road and Transport Authority of Dubai among its top customers, TCS serves Saudi Telecom. Domestic rivals Mahindra Satyam also counts Dubai Municipality and National Bank of Dubai among its key customers in the region.
Wipro’s Anand Sankaran said the crisis was not entirely unanticipated as reports of people in Dubai abandoning their cars in airports because of the economic slowdown have been around for 9-12 months. “To mitigate this risk, we started looking outside Dubai,” he said. Wipro’s IT business in the West Asia is around $80 million and its Dubai business is 15-20% of it.

Apart from exposure to Dubai, the impact on companies could be lower IT spends from West Asia, which was perceived to be a growth market. Tech Mahindra had announced several wins from the West Asia and multinationals like CapGemini had appointed a partner-level executive to open up the market, as opposed to handling it from its UK office earlier.
But possibly more worrying are Dubai’s linkages to the financial world. “Dubai has a lot of financial connections and there could be a
ripple value on the dollar. Any imbalances in the economy could have potential impact on the stability of the dollar and IT spending as well. Further, it is a negative sentiment for the financial sector,” said Ganesh Natarajan, former Nasscom chairman and CEO Zensar Technologies.

“West Asia accounts for mere 1-1.5% of exposure for Indian IT. So the revenue risk is only to that extent. However, the indirect impact could be more severe. Because European and US banks have direct exposure to West Asia, increasing default risk will turn this industry to be conservative in allocating capital and in their spendings, including IT spending,” said Alok Shende, principal analyst, Ascentius Consulting.

“US banks had recently started coming out to of their hibernation, and since US and European banking industry have a significant pie of Indian outsourcing industry, the risk aversion could slowdown the pace of outsourcing,” Mr Shende added. Mastek CMD Sudhakar Ram, however, said the impact was only a second or third order impact, it would not be very major. “As it is, companies were spending only on keeping the lights on. So they cannot cut back on that,” he said. But if indeed customers continue to spend only on keeping the lights on (or in other words, only absolutely necessary spends), then the much-awaited recovery that IT firms were anticipating may be delayed yet some more.

Pai denies ‘turf war' at Infosys

BANGALORE: The news of two Infosys top executives leaving the company due to various reasons, has given air to the rumor that a turf war is brewing in the top echelons of the IT behemoth, however, top brass of the company categorically denied any such thing.

Recently, a citizen journalist website, citing sources claimed that there was a “bitter turf war” within the company which puts Infosys at a risk of “losing some of the most respected executives in India.” “There existed two extremely strong factions within Infosys - Nandan Nilekani and Mohandas Pai…A united face to the world, the continuous tension between the two head honchos was a well kept secret restricted to the inner circle.

Those in Nandan’s faction (read Amitabh Chaudhary) are slowly being edged out of the inner circle after Nandan left the top post.

Latest to hit the bandwagon are Rishi Jain (AVP and Head of Corporate Planning at Infosys BPO) and Purnima Menon (Head - Marketing for Infosys BPO),” the website said.

Infosys HR Head, Mohandas Pai told Express, “There is no such turf war. Joydeep is leaving but he had put in his papers three months ago for personal reasons and we would be finalizing his successor shortly.” “Rishi and purnima have not resigned!” he added.

The resignation of Joydeep, who heads the Knowledge Process Outsourcing business of the company, was reported by news papers on Thursday.

Knowledge services contribute about 10 per cent of Infosys BPO’s annual revenue of over Rs 1,450 crore. Joydeep took over from Ramit Sethi, who quit last year to head the KPO practice at Wipro.

Amitabh Chaudhry, who took over as the Chief Executive of Infosys BPO in March 2006, had reportedly submitted his resignation on Tuesday.

The BPO arm of Infosys employs about 16,000 staff and offers finance and accounting, human resource and legal services outsourcing.

Chaudhry who is tipped to join HDFC Standard Life Insurance to head its business in India as CEO could not be contacted and HDFC Standard Life Insurance spokesperson declined to comment.

250,000 IT jobs up for grabs soon: Infy director

With the global economy gradually bouncing back, the IT job market is also picking up and around 2-2.5-lakh jobs in the sector are likely to be up for grabs, a top Infosys [ Get Quote ] official said on Wednesday.

"The job scenario is improving...this year the market is likely to see around 2-2.5-lakh jobs," Infosys director-human resources Mohandas Pai told reporters.

The IT jobs market will, however, not be the same as it was two years ago but will also not be as bad as it was last year, Pai said, adding the fresher-lateral hiring ratio is likely to be around 65:35 per cent this year.

Two years ago there were around 3-4 lakh jobs available in the IT market, he pointed out. The industry has witnessed a lower growth rate in the last 18-months, Pai said, adding that the market is not so open now.

Infosys has plans to hire around 20,000, Pai said, adding that, however, campus recruitments will be lower this year as compared to the last.

"This year, Infosys will be hiring around 20,000 as against 16,000 that we recruited last year. Campus recruitments, however, will be less," Pai said. However, did not divulge the exact number that he is planning to hire through campus recruitments.

Pai said that Infosys has given a 7-8 per cent hike across the board whereas globally it was two per cent. Attrition stood at 10 per cent at Infosys, he said.