No more employee rationalisation, selective hiring on: Satyam

Satyam’s Chief People Officer T Hari spoke to ET Now this morning. Here is the full transcript of his interview withthe channel:

First a word on the deal pipeline, a couple of deals have been signed, how is it looking, are you also witnessing the phenomenon that the client pressure is easing, pricing pressure is easing and there could be more deals in the pipeline?

Definitely, I think the message-compared to what we have gone through-is that clearly we are in a position where customer confidence is back. People are not talking about what happened anymore, people are talking about what can happen. So, some of these renewals and extensions are an expression of that confidence and these include potential expansion of our current scope of engagement also. So, it clearly means that we are moving on and we should be looking forward to similar such deals in the future.

What nature of business would these deals be, there are a couple of reports about companies adopting non linear strategies going ahead with regards to even business development for maintaining margins, is that something that is becoming conscious effort at Satyam as well?

That is right, in fact clearly the need is to not look at linear growth and there are pressures when you also increase the number of people. So, the clear direction is - can we provide for service based pricing and whether that could help move us forward? So, clearly Mahindra Satyam is also looking at similar engagement and possibility. I have to also of course say that those are still in the initial stages, there are not too many such deals happening, organisations or some customers, especially in the BPO space, have managed to transition to those models much more aggressively and much more faster but the IT services space is picking up, I would say at a slower pace.

We have heard that Qantas and DuPont are still in the wait and watch mode as far as giving business to Mahindra Satyam is concerned, do you see any positive developments coming out on that front?

I have to definitely say that we do not specifically comment on a given customer, but, I can say that some of the names that you are talking about have been bandied about even earlier. The truth is we continue to engage with most of our customers and have actually enhanced the scope of work in the past few weeks. So I do not think there are such concerns anymore. I would say that those pressures are over.

On employee rationalisation because that has been doing the rounds that because of business pressures, revenue pressures there has been rationalisation of employee levels, do you think that rationalisation is at an end now and in fact we might start to see fresh hiring spree now?

Absolutely, I would say that after we did, the virtual pool programme, we have not had any reason to expand that scope of rationalisation. What we have actually done is recall more than 1000 associates from the virtual pool back to the company in the past 2.5-3 months. I also anticipate that there are going to be select niche skills that we may have to hire. I am starting to see the traction, in fact pressures on me to go ahead and look at the market for a few select skills which we do not have internally. So I do not think there is anymore rationalisation that will be required and I do clearly see the need for additional hiring. Probably in a more enhanced and I would say expanded state by December-January but it will start in a trickle now.

Any update on the legal cases slapped by Caterpillar and Upaid, any updates there for now?

At this stage nothing much that I can add except to say that we are very keen to ensure that there are early settlements to all these programmes. We continue to explore various avenues for the same but at this stage there is no specific update given the state of many of these issues.

There is a report which speaks about a lot of attrition which happened which was voluntary as well as involuntary, now you spoke about there being a possibility of fresh hiring happening, would that essentially be an indication that business is starting to look up in those niche areas or is it essentially to beef up the team for potential future businesses?

Both aspects, one is that clearly the backfilling for some of the voluntary attrition is being done out of the virtual pool programme. So, we are bringing back people wherever possible from within the virtual pool, but, we also notice that there are select areas especially in the enterprise solutions space where we have exhausted what we have in the organisation and also in the virtual pool programme. So that means we are expanding in those specific areas and we would be continuing hire in those areas too.
Can you give us a sense of what kind of numbers we might expect out of the new contract that Mahindra Satyam has bagged right now, just a ballpark number to give an assessment of where revenues are headed?

Let me put it this way. The GE assignment as you know is one of our top 3 customers and clearly about almost 1500 people are engaged in this engagement and many of the customers that we are currently dealing with we are starting to see either a continuity of the same size- that is pre-Jan size- and in some cases we are starting to see expansion beyond that. But, I would not be able to really pin a number and say that broadly our revenue numbers would be towards a given let us say, whatever is the number that you might want to hear, I do not think I will be able to commit on that. Needless to mention that we definitely are in the billion dollar range and that is what we have been saying in the past few months too.

Wipro to open development centre in Australia

BANGALORE: Global software major Wipro Ltd will boost its presence in Australia by opening a 150-seat software development centre at Melbourne this December, the IT bellwether said on Wednesday.

Announcing the decision on the occasion of Victoria premier John Brumby's visit to the company's corporate headquarters in this tech hub, Wipro Chairman Azim Premji said the Victorian operations would strengthen the company's Australia delivery capabilities and boost its presence in the country.

"Victoria accounts for about 50 per cent of our business in Australia, with some of our large clients based there. We have a close working relationship with the Victorian government," Premji told Brumby on the occasion.

Wipro has about 800 employees working for Australian clients. The IT giant recently launched the Australian scholarship programme, as part of the graduate recruitment programme in collaboration with the Australian Computer Society (ACS) Foundation.

"Victoria also offers many world-class universities and large numbers of highly skilled ICT graduates. Such a combination of support and talent is what we look for in a strategic business location," Premji noted.

Welcoming Wipro to his province, Brumby said the IT bellwether was in talks with some Victorian universities for internships, skill development and joint projects.

"Wipro's Melbourne operations will play an integral role in its expansion in Australia. The decision to base one of its centres in Melbourne is testament to our government's focus on innovation and the information and communications technology (ICT) sector," Brumby said.

The company plans to hire about 100 local engineers for the centre in the next 12 months to provide integrated business, technology and process solutions to clients there.

"Victoria accounts for a third of Australia's ICT enrolments to create skills required by global firms like Wipro," Brumby added.

With the second largest population (five million) in Australia, Victoria is one of the world's greatest migration success stories. About 70 per cent of Victorians live in the state's capital Melbourne. The province contributes about 25 per cent to the country's economy.

Wipro's leading rival Infosys Technologies Ltd also operates a subsidiary in Australia.

Earlier, interacting with members of the Association of Biotechnology-led Enterprise (ABLE) and the National Association of Software and Services Company (Nasscom) here, Brumby said his province was an attractive destination for trade and investment.

"Indian firms should invest in Victoria taking advantage of innovation, biotechnology and ICT," the premier added.

CSC lands Nissan contract

Nissan North America has hired CSC to run its information technology services at its facilities in North America.

Falls Church-based CSC did not disclose the financial terms of the multi-year contract.

Under terms of the contract, CSC will provide support for desktop computers, PDAs and other wireless hand-held devices. It covers Nissan operations at 40 facilities in the United States and North America.

Announcement of the Nissan contract comes three days after a much larger deal for CSC. On Friday, The Washington Business Journal reported the Transportation Security Administration awarded CSC an IT contract previously held by Unisys Corp worth at least $2 billion.

TSA has not made a formal announcement.

CSC (NYSE: CSC) had net income of $133 million last quarter on $3.9 billion in sales. It has $16 billion in annual sales and about 10,000 Washington area employees.

HCL regional head goes

BRIAN Pereira, the Asia-Pacific head of Indian SAP consultancy HCL Axon, has left the company.

Based in Sydney, Mr Pereira joined HCL Technologies about three years ago and was promoted to run HCL Axon's regional business in January.

HCL Technologies acquired British-based SAP services outfit Axon late last year for $US811million.

Mr Pereira's role will be absorbed by the new Asia-Pacific head for HCL Technologies, Virender Aggarwal.

Singapore-based Mr Aggarwal joined HCL from beleaguered IT services firm Satyam Computer Services, now known as Mahindra Satyam.

Mr Pereira said: "I've had a wonderful experience leading and working with some very smart, motivated people, with strong values that helped HCL win significant deals in the last three years.

"(We've) posted year-on-year growth of over 40 per cent every year for three years as a result."

He is in the midst of completing the scholarship he won from the Australian Institute of Company Directors.

An HCL spokeswoman said HCL Axon's Australia-New Zealand business would be managed by Nicholas Mott.

"ANZ is an important geography for HCL and we are comprehensively looking at our strategy for the region," she said.

A new head of HCL Technologies Australia will be announced shortly.

HCL to hire 2k pros to serve new customers

NEW DELHI: India’s fourth-largest software exporter HCL Technologies plans to hire 2,000 software engineers in the next three-four months to leverage new client base and existing operations across verticals, said a top company executive.

While 30% of the new hires would be freshers, the remaining 70% will comprise experienced professionals. This will take the company’s total workforce to more than 57,000 globally.

The software major struck various IT outsourcing services deal in the past few months, which has led to an increase in demand for workforce. Till last year, the company was high on campus hiring and took 15,000 freshers and professionals on rolls.

However, the firm intends to go slow on campus hiring this year owing to overall slowdown in demand for IT services world-wide.

“We are following just-in-time model of hiring. Unlike earlier when we used to give hiring guidance 18 months in advance, it will be a quarter or two in advance, as we are yet to have a clear visibility on where the industry is heading. Focus will be on lateral hiring for core IT processes across sectors,” said HCL Technologies global head (human resources) Dilip Kumar Srivastava.

He said the company has no plans to alter the compensation package of the freshers and that variable component of the salary will solely be performance based. Early this year, the company had put a freeze on employee salaries and resorted to bonus cutbacks, citing tight demand and declining volumes in the US and Europe as the rationale.

HCL has added a couple of new clients in the past few months. The firm bagged two IT outsourcing services contracts worth $110 million from Texas-based energy companies, Energy Future Holdings and Oncor.

To support the growing business, the company will also scale up headcount in Texas over the next few months.
The company currently serves clients in sectors, such as aerospace, defence, financial services, government, retail, lifesciences and telecom.

Need watchdog for tourism sector

India, Sept. 27 -- This is one of the earliest cases against a travel agent that came up before the Tamil Nadu State Consumer Disputes Redressal Commission.

K. Senthilrajan, who was going to Singapore for an entrance examination, was assured that he had confirmed tickets. However, his travel agent's claim turned out to be false and he had to spend all his money to buy an executive class ticket at the airport, so that he could reach Singapore in time for the examination.

On his return, the airline said he could not use the return ticket originally bought through the travel agent, as he had not used it for the onward journey. With no money in hand (there were no international credit cards or cell phones then), Senthilrajan threatened to commit suicide and was finally allowed to use the return ticket, but after six days of waiting.

I have received a number of letters from readers on the issue of negligence of travel agencies and tour operators. Unfortunately, there is no Ombudsman to resolve such issues.

If tourism is to flourish as an industry, there should not only be stringent quality standards for all service providers, but also a scheme of Ombudsman to resolve disputes between consumers and service providers. Mr Pankaj Goel asks: My travel agent made a wrong hotel booking (18 kms from the conference venue in Boston, USA).

On telling her she penalised me 15,000 INR as cancellation charges. This was double trouble as I had to make my own booking at the last moment.

Answer: This is a clear case of negligence and you must file a complaint before a consumer forum to get back your money. Your plea should include not only the cancellation charges but also any additional amount that you had to spend on booking another hotel.

You can also ask for compensation for harassment and inconvenience that you underwent as a result and any other additional expenses you incurred. Consumer forums also provide compensation for a ruined holiday and, of course, cost of litigation.

In the case of Arnab Kr Sarkar Vs M/S Seema Travels (RP NO 2130 of 2000) the National Consumer Disputes Redressal Commission observed: "If a holiday is ruined by virtue of breach of contract on the part of the tour operator, damages can be recovered in respect of the distress, disappointment and inconvenience suffered by the consumer". I would suggest that consumers also take adequate precautions while hiring the services of travel agents and tour operators.

If you go on to the union tourism ministry's website (http://.tourism.

nic.in) and click on the icon that says 'approved list', you will get a list of travel agents and tour operators approved by the ministry.

That's a good way to start.

Xerox to Buy Affiliated Computer in Its Biggest Acquisition

By Katie Hoffmann

Sept. 28 (Bloomberg) -- Xerox Corp. agreed to buy Affiliated Computer Services Inc. for $6.4 billion in its biggest purchase, shifting to computer services as sales of its printing equipment drop.

The acquisition will help triple sales from services to about $10 billion, Xerox said today in a statement. The total price of the cash-and-stock deal is about 34 percent more than Dallas-based Affiliated Computer’s closing price Sept. 25.

Chief Executive Officer Ursula Burns, who took over in July, is increasing Xerox’s debt and more than doubling the number of workers at the world’s largest maker of high-speed color printers to about 128,000. Her predecessor, Anne Mulcahy, helped Xerox avoid bankruptcy this decade by paring debt, exiting unprofitable businesses and shedding jobs.

“It’s going to take a Herculean effort to integrate these two companies,” said Peter Falvey, a managing director at Revolution Partners LLC in Boston. “There is significant execution and integration risk. It’s a very bold bet.”

Affiliated Computer jumped $6.80, or 14 percent, to $54.05 on the New York Stock Exchange at 11:04 a.m. Xerox, based in Norwalk, Connecticut, fell $1.44, or 16 percent, to $7.54, the biggest intraday drop since March. The stock had climbed 13 percent this year before today.

Government Contracts

The transaction helps Burns expand into a market Xerox values at about $150 billion and gives her a foothold in managing administrative operations for multiple arms of the U.S. government.

“With this combination, our tool box just got a lot bigger,” Affiliated Computer CEO Lynn Blodgett said in an interview. Blodgett will run the business as a unit of Xerox and report to Burns, 51.

Almost 90 percent of Affiliated Computer’s new business contracts last year came from outsourcing, or managing operations for other companies. Total sales rose 5.9 percent to $6.5 billion in the year ending June 30.

Xerox has posted sales declines for three straight quarters, with analysts projecting a fourth, according to the average of estimates compiled by Bloomberg. Global spending on technology products will fall 8 percent this year, Goldman Sachs Group Inc. said this month.

Xerox has about 54,000 employees, while Affiliated Computer has 74,000 workers. Xerox said annual cost savings from the deal will increase to as much as $400 million in three years.

Payment Terms

Xerox will pay $18.60 a share in cash and 4.935 Xerox shares for every Affiliated Computer share, amounting to about $63.11, based on closing prices as of Sept. 25. Xerox also will assume about $2 billion in Affiliated Computer’s debt. Xerox had $1.22 billion in cash and cash equivalents at the end of last quarter, and about $6.7 billion in long-term debt.

Mulcahy, who took over in 2001, had brought down the company’s debt from more than $18 billion the year before she took over. She cut at least 20,000 jobs to revive Xerox after the bursting of the technology bubble left Xerox with mounting borrowings and its first annual loss in five years.

Under Mulcahy, Xerox stopped making personal copiers and started focusing on laser printers, as well as color printing. Earlier this month, Xerox said it would begin selling digital printers for packaging and labels, aiming to tap a new market.

Services Acquisitions

The recession may have hastened Xerox’s decision to expand in services as companies curbed spending in its equipment, said Falvey, whose investment bank worked with Xerox on a prior deal.

This month, Dell Inc. agreed to buy Perot Systems Corp. for $3.9 billion to expand into computer services. Last year, Hewlett-Packard Co. bought Electronic Data Systems Corp. for $13.2 billion in a similar deal.

“There’s just no question that some of these big guys are looking to become more horizontal,” said Falvey. Computer Sciences Corp. and some Indian outsourcing companies may become targets, he said.

Computer Sciences, the manager of networks for NASA and the U.S. Navy, rose $2.53, or 5 percent, to $53.32 on the New York Stock Exchange. Cognizant Technology Solutions Corp., another provider of consulting and computer services, gained 74 cents, or 2 percent, to 38.55 on the Nasdaq Stock Market.

JPMorgan Chase & Co., Blackstone Group LP and Simpson Thacher & Bartlett LLP are advising Xerox on the transaction, and Citigroup Inc. and Cravath, Swaine & Moore LLP are working with Affiliated Computer. Evercore Partners Inc. and Ropes & Gray LLP are counseling a special committee of Affiliated Computer’s board.

A Manager Should Walk the Talk

Image: Vikas Khot
Subramanium Ramadorai,CEO & MD, TCS

Name: Subramanium Ramadorai
Designation: CEO & MD, TCS
Career: Spent 38 years at TCS
Age: 65 years
Education: Bachelors degree in Physics from Delhi University, a Bachelor of Engineering degree in Electronics and Telecommunications from the Indian Institute of Science
Interests: Music, photography and traveling

You started off as a programmer and are retiring as the CEO&MD. Which is tougher: managing 100,000 lines of code or 100,000 people?
Both have their own sets of challenges. When you are coding you have to make sure it works, it can be scaled and gets to the customer in time. But there is only one customer you are worried about. When you are managing people then you have think of all the people and all the customers as well. The big picture is far more challenging when you are managing people.

Many who work in software firms think managing is a job for the suits…
Well, to be fair to them, you’ve got to have the fundamentals right. You have to be able to roll up your sleeves and be confident that you can at least understand the problem and then offer thoughts that are action-oriented. That’s because strategy and operations are so intertwined today. You can’t say that I will do strategy while someone else does the operations. To have peer acceptance in a technology company you must be able to understand technology. Ideally, you should have written, tested and deployed code!

So are you saying that hiring people from other industries has its limitations?
No. They are extremely useful for getting in the domain knowledge. People who have worked in banking or life sciences will bring in that perspective. But as a manager you should be able to walk the talk.

We associate Wipro with Azim Premji, Infosys with N.R. Narayanamurthy, but there is no one person that to associate with the company. Was this a conscious decision?
It was a very conscious decision. What you need is a great team. A manager is only as good as his team. And then the manager should be able to lead by example. Ever since I became the CEO in 1996 we have tried to create a culture where our approach is consensus-based. I should not be holding a meeting simply because I am the CEO. So when the senior management hold a meeting, they ask me to attend because I can add value.

If there are multiple leaders, then it must have been very difficult for you to pick a successor. How did you choose N. Chandrasekharan?
It is a journey rather than an event. There are many factors you consider but one of them is how well a person has done in multiple roles. So you see how they have done in marketing, sales, HR, finance et al. Once you empower some people will pick up the ball others will wait on the side line to be told what to do. Then, you have to see if they have been able to build a team wherever they have had the leadership position. Finally, you have to be very transparent with the people, who are equally capable, but who are not going to make it. You have to then gauge whether they [people who will not get the top job] will support the new person. Based on all these parameters you decide.

In your tenure, TCS pursued several large deals. For example, the 12-year Pearl deal. Has this approach benefitted TCS?
From a business case point of view we have achieved our objective. The question is how do you scale up to take advantage of the opportunity we have got.

TCS has also been at the forefront of industrialization of software. Even your peers say that you have achieved a lot there. How did that happen.
We were very fortunate that we had many people in our R&D unit who were interested in the industrialization of software. People like Keshav Nori, professor Subbarao, Mathai Joseph and K Padmanabhan. And they wanted software development to be like an industrial activity rather than a pure artisan approach. But you can’t ignore the artisan aspect of programming so today we also have the best coder contest where almost 12000-15000 employees participate.

You have always come across as a very serious man. What is the funniest movie that you have seen?
I have seen a lot of funny movies. I especially like Mehmood in Hindi films and Nagesh in Tamil films.

India among most corrupt nations

Corruption has become as way of life across the world, costing global economies billions of dollars every year.

Transparency International's (TI) Global Corruption Report 2009 shows how bribery, price-fixing cartels and undue influence on public policy undermine fair competition, stifle economic growth and ultimately undercut a business's own existence.

About half of international business executives polled by TI estimated that corruption escalated project costs by at least 10 per cent.

The report reveals that consumers around the world were overcharged approximately $300 billion through almost 300 private international cartels discovered from 1990 to 2005.

In developing countries alone, companies colluding with corrupt politicians and government officials have supplied bribes estimated at up to $40 billion annually, according to TI.

Companies with anti-corruption programmes and ethical guidelines are found to suffer up to 50 per cent fewer incidents of corruption and are less likely to lose business opportunities than companies without such programmes.

Capgemini on a hiring spree

SOUNAK MITRA

Recruitment drive

Calcutta, Sept. 26: French IT giant Capgemini is in a hiring mode in India.

“We are hiring and the number will be significant this year,” Anish Sarkar, Capgemini India vice-president (head of sales), told The Telegraph.

Capgemini recruited 5,586 people in the first six months of this year. The company had earlier said it would ship more jobs to cheaper locations such as India to trim costs.

A company source said the hiring would be around 100-150 per month for the next two quarters.

The company’s Calcutta office is spread over 1,75,000 square feet and the current headcount stands at around 1,000.

“We have space for about 1,000 more and hiring would happen accordingly,” Sarkar said.

Capgemini plans to increase its headcount in the country by 10 to 15 per cent in 2010.

The company has 21,000 employees in the country to provide outsourcing services to global customers, making the country its largest location in terms of headcount and accounting for a fifth of its global workforce of about 90,000.

Capgemini has six offices in Mumbai, Bangalore, Calcutta, Pune, Hyderabad and Chennai. It also has a satellite office in New Delhi.

Capgemini is focusing on sectors such as consumer products, retail, telecom, media and entertainment.

“We are also looking at manufacturing, energy and utilities. There is also a good demand for outsourcing jobs in application and maintenance,” Sarkar said. Government projects would be another thrust area for the company.

Earlier in July, Capgemini had reduced its 2009 sales outlook, saying it was doubtful whether the signs of stability in some regions would translate into a full-blown recovery for the battered technology sector.

However, the company also said it was trying to grow outside the core developed markets such as Europe and North America and the focus for growth would be the Asia Pacific region.

ID project

The French firm is keen to join the Centre’s Unique Identification Database programme.

“We had worked for similar projects in Europe and we have strong credentials. Prior experiences would be useful here,” Sarkar said.

The company is waiting for the government to get ready with the fine print of how the project would be undertaken, he said.

Satyam to give promotions, hikes

NEW DELHI: Seems hikes and promotion time is back in IT! After TCS and Infosys announcing their decision to go for selective hikes and promotions, Mahindra Satyam is all set to join its peers.

According to a report in a business daily, the company is all set to soon start the promotions cycle in certain departments. Quoting a company official, the report says that employees identified as high performers will be given promotions and pay hikes.

The official said that the move aims to recognise employees’ commitment and dedication to the organization.

Earlier this month, Mahindra Satyam said that it has reinstated the variable portion of employee salaries. The company also restored the stock options given to employees across levels.

The erstwhile Satyam had withdrawn variable pay in April citing tough business environment.

In January, Satyam founder Ramalinga Raju shocked the business world when he admitted to a Rs 7000-crore accounting fraud. The accused faces charges of cheating, criminal conspiracy, falsification of records and forgery.

The scam-hit Satyam was later acquired by Tech Mahindra, the IT arm of the Mahindra group, and renamed Mahindra Satyam.

Judge Orders Google To Deactivate User's Gmail Account

In a highly unusual move, a federal judge has ordered Google to deactivate the email account of a user who was mistakenly sent confidential financial information by a bank.

The order, issued Wednesday by U.S. District Court Judge James Ware in the northern district of California, also requires Google to disclose the Gmail account holder's identity and contact information. The Gmail user hasn't been accused of any wrongdoing.

The ruling stems from a monumental error by the Wilson, Wyo.-based Rocky Mountain Bank. On Aug. 12, the bank mistakenly sent names, addresses, social security numbers and loan information of more than 1,300 customers to a Gmail address. When the bank realized the problem, it sent a message to that same address asking the recipient to contact the bank and destroy the file without opening it. No one responded, so the bank contacted Google to ask for information about the account holder.

In keeping with its privacy policy, Google told the bank it would have to get a court order to obtain such data. The bank then filed papers asking a court to order Google to disclose the information and deactivate the account.

The bank attempted to file its papers under seal, but U.S. District Court Judge Ronald Whyte denied that request. Earlier this week, the case was transferred to Ware from Whyte.

Some lawyers say the Ware's order is problematic because it affects the Gmail account holder's First Amendment rights to communicate online, as well as his or her privacy rights.

"It's outrageous that the bank asked for this, and it's outrageous that the court granted it," says John Morris, general counsel at the Center for Democracy & Technology. "What right does the bank have and go suspend the email account of a completely innocent person?"

He adds: "At the end of the day, the bank obviously screwed up. But it should not be bringing a lawsuit against two completely innocent parties and disrupting one of the innocent party's email contact to the world."

Eric Goldman, director of the High Tech Law Institute at Santa Clara University, adds that the judge's order could have significant ramifications for the Gmail account holder. "Losing an email account is a big deal," he said. "It's very disconcerting to think that a judge could simply order my account deactivated."

A Year Later, H.P.’s Bet on E.D.S. Looks Like a Winner - NYTimes

PALO ALTO, Calif. — By many measures, it has been a tough year for employees of Electronic Data Systems.

Minh Uong/The New York Times

Jim Wilson/The New York Times

From left, Shane Robison, Hewlett’s chief strategy and technology officer; Joe Eazor, senior vice president; and Ann Livermore, vice president of technology services; last week in Palo Alto Calif.

After Hewlett-Packard bought the computer services company last August for $13.9 billion, it immediately began hacking the work force. Led by a master cost-cutter, Mark V. Hurd, H.P. laid off 25,000 E.D.S. workers, and cut the salaries of some by more than 20 percent. Mr. Hurd even stripped the E.D.S. brass of their plush offices and corralled them into 6-by-6-foot cubicles.

But despite the risk that disgruntled employees and customers would walk out the door, the acquisition has paid off big for H.P. — so well, in fact, that an important rival has decided to strike a similar deal. Dell announced Monday that it was paying $3.9 billion for Perot Systems, the Texas computer services company started by H. Ross Perot after he left E.D.S.

Plenty of employees have complained about H.P.’s tactics, but the company says it has persevered through the turmoil to keep most of E.D.S.’s customers. Last quarter, H.P.’s operating profit margin on services hit 13.8 percent, the highest in a decade. And the combined company’s services division is H.P.’s biggest business in terms of revenue — a remarkable metamorphosis for what has long been viewed as a slow-growth PC and printer maker.

On Wednesday, H.P. will take another big step toward full integration of E.D.S., extinguishing the 47-year-old company’s name. The new name, H.P. Enterprise Services, reflects the union of the services operations at the two companies.

“I acknowledge that we have done a lot of hard stuff, but this is all about getting H.P. in a position where we can compete and win,” said Ann Livermore, an executive vice president at H.P. who heads its services and data center products businesses.

In talks with E.D.S. employees, executives have put it more bluntly. At one meeting in August, Andy W. Mattes, who runs H.P.’s services business in the Americas, said that the deep salary reductions and broad cost cuts were for the good of the remaining employees.

“Just letting things go on will result in much more bleak and horrible scenarios,” Mr. Mattes said, according to an audio recording of the meeting.

The bloodletting pains Mort Meyerson, who served alongside Mr. Perot at E.D.S. and Perot Systems for many years. “It’s sad to see this happen because of the decades of work the men and women of E.D.S. put into the company,” he said. “But that’s what happens in business.”

H.P. executives concede that the company’s aggressive pruning comes with costs, as workers fret about their futures and the overall business endures some disruption.

But they say that tough actions were needed to bring E.D.S. in line with competitors like I.B.M., Infosys and Wipro Technologies.

By common business yardsticks, the Hurd touch on E.D.S. appears to have worked better than investors and analysts had expected.

When H.P. announced its intent to buy E.D.S. in May 2008, H.P.’s share price sank. E.D.S. had developed a reputation as a bloated has-been that had burned investors in the past through bad deals, accounting issues and an overreliance on services contracts with the government and automakers.

And while E.D.S. received high marks from customers for its role in taking over their technology operations, it required far more people than competitors to accomplish the task.

“It was almost, the closer you were to E.D.S., the more concern you had about the acquisition,” said Shannon Cross, an equities analyst with Cross Research.

E.D.S.’s own efforts to lower costs had stalled, particularly since the company lacked the financial resources to undertake a major reorganization, according to Joe Eazor, a former E.D.S. executive who is now a senior vice president and general manager of services at H.P.

Investors were also worried about change-of-control provisions in contracts that would allow customers to renegotiate or cancel long-term deals with E.D.S.

But H.P. has held onto 199 of the top 200 accounts at E.D.S., according to Mr. Eazor. Some of the deals have been reworked, but H.P. points to its improving operating margins in services as evidence that any reductions in revenue have been minor.

Meanwhile, as sales of printers, PCs and data center gear have plummeted during the recession, H.P. has used services to bolster its overall revenue and profits. “The deal has really helped insulate them from the downturn,” said Ben Reitzes, an analyst with Barclays Capital. “Without E.D.S., things could have been a lot worse.”

According to analysts, H.P. may have engineered the deal at just the right time. The down economy gave H.P. time to perform its painful restructuring and primed the company to grow when the good times returned.

Historically, E.D.S. promoted computing gear from H.P. rivals like Sun Microsystems, Xerox and Cisco Systems. But Mr. Eazor says that more of H.P.’s own hardware is slated to go into deals that are currently up for bid.

H.P. has been criticized by some analysts and derided by competitors for declining to detail the value of the services deals it has signed, as is industry practice. During a meeting this week with analysts, H.P. plans to reveal that it recently closed 32 deals valued at more than $100 million and that its customer service scores rose over the past year.

Niall Quinn, the director of commercial management for Aviva, an insurer, said that H.P. had held up well under the pressure of the acquisition. In March, Aviva picked H.P. over I.B.M. for a $1 billion, 10-year outsourcing contract in Britain.

But, while Aviva has committed to H.P. for the long haul, Mr. Quinn said he had short-term concerns.

“Mark Hurd is a bit focused on hitting numbers on a quarterly basis, and some of the things he’s done, people in Europe find quite amazing,” Mr. Quinn said. “The layoffs are a concern because what you’re buying is tremendous expertise.”

H.P.’s critics, including current and former employees, warn that the company has done away with too many high-salaried, veteran executives. Jeff Kelly, who had run the E.D.S. business in the Americas, left the company in March, leaving a gap in the company’s most crucial region. His successor, another E.D.S. veteran, Mike Koehler, left in May. Now Mr. Mattes, who came from the H.P. side, is in charge.

The heads of finance, human resources, sales and software services left E.D.S. earlier this year as well.

Current and former employees, who requested anonymity because they signed nondisparagement agreements with H.P. or are afraid of being fired, complain that H.P.’s tactics work better for a product company. In the services realm, customers depend on their long-standing relationships with executives and sales team leaders.

In addition, morale has dipped, particularly in the United States, where most salary cuts have taken place, these people say.

I.B.M., H.P.’s biggest competitor in services, contends that customers have been complaining about disruption in their H.P. accounts.

“In the services business, if cost-cutting and price are the only levers you have to compete, it’s not sustainable,” said Dave Liederbach, the general manager of I.B.M.’s outsourcing business. “The chaos that results in a client situation will be severe.”

H.P. paints a much different picture, saying that for the first time, it has enough salespeople and services expertise to go up against I.B.M. for some of the largest, most lucrative contracts.

Capgemini seeing recovery in fin services sector

BANGALORE (Reuters) - Capgemini SA is seeing some recovery in its financial services business as clients look to cut costs and boost growth, and the pricing environment is stable, a senior official said on Thursday.

Europe's largest computer consultancy is looking to boost Asia-Pacific's contribution to revenue to 5 percent in three years, said Salil Parekh, global head of Capgemini's financial services and CEO of Asia-Pacific business units.

Asia Pacific brought in about 1.5 percent of Capgemini's total revenue in the first half of this year.

"In financial services, we have started to see some level of recovery already in the later half of this year, and certainly we are hoping to see some of that in 2010," Parekh told Reuters in an interview.

"Recovery is not like a quick, rapid recovery. It's coming together across the world in a slow fashion," he said. "My guess is if we start to see growth coming back within 12 months, pricing should be back."

Capgemini cut its 2009 sales outlook in July, saying it was unsure signs that activity might be stabilising in some regions would translate into a full-blown recovery for the battered technology sector.

(Reporting by Sumeet Chatterjee; Editing by John Mair)

Wipro May Be Trimming Its IP Licensing Business

Indian outsourcer Wipro is considering exiting its business of creation and licensing of intellectual property (IP) in the area of connectivity, a company executive said on Thursday.

The move will be in effect a reversal of Wipro's acquisition in 2005 of NewLogic Technologies, a privately held Austrian semiconductor IP and design services company. The company was focused on offering IP and design services in the areas of Bluetooth and wireless LANs.

While Wipro's core strength was in digital chip design, NewLogic was focused on analog and mixed signal design, company executives said at the time of the acquisition. The acquisition also offered Wipro access to European customers.

Wipro now finds that the market for its portfolio of connectivity IP is not viable, because of decreasing customer interest and increasing price pressures, Pramod Idiculla, general manager for strategy in the Wipro Technologies business of Wipro, said in an e-mail on Thursday.

The company has started consultations with employee representatives regarding its proposed exit from this portfolio and the potential closure of its center in Sophia Antipolis in France, he added.

The future of the Sophia Antipolis facility, which became part of Wipro after the NewLogic acquisition, has become controversial with the French government also stepping in, according to some reports.

Wipro is in consultation with employee representatives regarding about 60 employees that may be affected, Idiculla said. The company has conveyed to the French government that it will try to reduce potential redundancies, and identify opportunities for redeployment of the employees, he added.

This will be the second time Wipro is shutting down a business focused on the creation and licensing of IP. In the 1990s, it set up EnThink, a company in the U.S. to market IP.

Wipro has not yet taken a final decision on closing the connectivity IP business, or whether it will sell off the IP assets it got from NewLogic, Idiculla said.

However if its proposals regarding the Sophia Antipolis facility are accepted, Wipro plans to exit the connectivity IP business globally, he added.

GE extends deal with Mahindra Satyam

HYDERABAD: General Electric (GE) has extended its multi-million dollar contract with India's leading consulting and IT services provider Mahindra Satyam for the next three years, the company said.

Among Satyam's top five customers for over a decade, GE is supported in the specialised areas of application development maintenance, business intelligence and engineering services.

The New York-based GE has similar contract with 11 other technology vendors worldwide.

"We recognise the support extended over the years by Satyam and their commitment to delivery excellence even during trying times," GE's global development centre leader Steve Morrison said.

According to Satyam's global account executive Arvind Malhotra, the extension of the deal by GE was a testimony to the commitment the company's engineers demonstrated.

"The contract symbolises the value we have been able to add through our services to GE," Malhotra added.

The scam-hit Satyam was later taken over by Tech Mahindra, the IT arm of the Mahindra group, and renamed as Mahindra Satyam.

Satyam founder Ramalinga Raju stunned corporate India on January 7 this year by admitting the Rs 78-billion multi-crore accounting fraud. The accused face charges of cheating, criminal conspiracy, falsification of records and forgery.

Wipro looks to sell French unit as employee protests mount

MUMBAI | BANGALORE: Wipro plans to explore options to sell its development centre at Sophia Antipolis, France, because of extensive employee protests against shutting it down.

The issue had snowballed into a major controversy with the involvement of the local French government officials. Wipro had initiated talks to close down the centre that it acquired from Newlogic because of poor demand. The centre employs around 60 people.

“As part of the ongoing process, we will continue to look favourably on any proposal that we may get from interested parties willing to continue part of totality of the activities in the Sophia Antipolis centre,” Pramod Idiculla, general manager (strategy), Wipro Technologies, told ET. The Indian IT firm acquired privately-held Newlogic in 2005 for around $56 million.

A cross-section of consultants ET spoke to said Wipro may find it hard to sell the facility in this environment. “I am not sure, if the Newlogic unit will find any buyers. A safer bet would be to wait for the demand to improve and then take a call,” said a semiconductor design consultant based in Germany.

“These 60-odd engineers may be few in numbers, but any move to sack them will create a public unrest in this region, there’s already pressure on EU countries to ensure that jobs do not go outside the region,” he added.

In response to a question on whether Wipro would go ahead with its earlier decision to shut down the facility, if it does not find any buyers, Mr Idiculla said the company was still in the process of consultation with employee representatives. “A final decision will be taken after the consultation,” he said.

“We have reiterated to the French government our commitment to help reduce the impact of any potential redundancies that may arise as a part of this process and our commitment to try and identify opportunities for redeployment for employees,” added Mr Idiculla. The company said it is also open to any proposal from the employees about creation of businesses, which may provide solutions for employees.

Wipro’s experience may have implications for other Indian IT firms, which are targeting higher business and expansion, in continental Europe. Continental Europe is a tough market with majority of organisations preferring local IT vendors. “These are business decisions and in a free market economy, government interference will only reduce the attractiveness of the location,” said a top executive at one of Indian IT firm with businesses in the US and Europe.

“Wipro’s decision doesn’t come as a surprise. Leading European firms are shifting more of their design work to lower-cost offshore locations, particularly India and specifically Bangalore,” said Peter Schumacher, president and chief executive of German management consultant firm Value Leadership Group.

HP whips out new flags to mark EDS name change

By VICTOR GODINEZ / The Dallas Morning News
vgodinez@dallasnews.com

It's the end of the road for Electronic Data Systems Corp., the company that launched the information technology outsourcing industry.

Hewlett-Packard Co. said Wednesday that it is renaming Plano-based EDS, which it bought last year for $13.9 billion, to HP Enterprise Services.

But HP officials said the name change doesn't mean the beginning of another round of job cuts or salary reductions.

"Nothing operationally changes between yesterday and today," said David Gee, vice president of worldwide marketing for the new HP Enterprise Services.

HP has eliminated nearly 25,000 jobs at EDS and cut salaries several times since the deal was finalized.

The most visible changes Wednesday were at EDS' main campus in Plano.

Tuesday night, workers swapped out almost all signs, flags and paraphernalia bearing the previous brand name with HP Enterprise Services signs and gear.

Other locations will take longer to make the name switch, particularly in countries where the EDS-HP deal is not yet finalized because of legal or regulatory issues.

Gee said HP made the change because that's what clients wanted.

"I've talked to probably more than 100 clients personally about what our options are: Do we keep the EDS name? Do we sunset it? Here are some alternatives that we could name the business going forward," Gee said.

"Universally, what the client community told us is that 'we want you to show up as HP.' That was across the board."

Analysts had speculated from the beginning that HP might quickly retire the EDS brand.

Although it's not a surprise, the change does mark the final chapter for the independent company that Ross Perot created in 1962. EDS kicked off a new industry of specialized companies helping corporate clients and government agencies manage their IT departments.

Perot's follow-up company, Perot Systems Corp., founded in 1988, said this week that it is being bought by Dell Inc. for $3.9 billion.

Perot declined to comment Wednesday on the HP renaming.

HP whips out new flags to mark EDS name change

By VICTOR GODINEZ / The Dallas Morning News
vgodinez@dallasnews.com

It's the end of the road for Electronic Data Systems Corp., the company that launched the information technology outsourcing industry.

Hewlett-Packard Co. said Wednesday that it is renaming Plano-based EDS, which it bought last year for $13.9 billion, to HP Enterprise Services.

But HP officials said the name change doesn't mean the beginning of another round of job cuts or salary reductions.

"Nothing operationally changes between yesterday and today," said David Gee, vice president of worldwide marketing for the new HP Enterprise Services.

HP has eliminated nearly 25,000 jobs at EDS and cut salaries several times since the deal was finalized.

The most visible changes Wednesday were at EDS' main campus in Plano.

Tuesday night, workers swapped out almost all signs, flags and paraphernalia bearing the previous brand name with HP Enterprise Services signs and gear.

Other locations will take longer to make the name switch, particularly in countries where the EDS-HP deal is not yet finalized because of legal or regulatory issues.

Gee said HP made the change because that's what clients wanted.

"I've talked to probably more than 100 clients personally about what our options are: Do we keep the EDS name? Do we sunset it? Here are some alternatives that we could name the business going forward," Gee said.

"Universally, what the client community told us is that 'we want you to show up as HP.' That was across the board."

Analysts had speculated from the beginning that HP might quickly retire the EDS brand.

Although it's not a surprise, the change does mark the final chapter for the independent company that Ross Perot created in 1962. EDS kicked off a new industry of specialized companies helping corporate clients and government agencies manage their IT departments.

Perot's follow-up company, Perot Systems Corp., founded in 1988, said this week that it is being bought by Dell Inc. for $3.9 billion.

Perot declined to comment Wednesday on the HP renaming.

Dell to buy Perot Systems for $3.9 bn in cash

New York/San Francisco: Dell Inc plans to buy Perot Systems Corp for about $3.9 billion, paying a steep 67.5 per cent premium to expand its technology services business and compete with Hewlett-Packard Co and IBM.

Perot Systems, a computer services provider founded in 1988 by former US presidential candidate Ross Perot, would be the largest ever acquisition by Dell and comes after extended speculation about its M&A strategy.

Dell, which lags far behind HP and IBM in the services arena, is looking to buy a company with a strong focus on serving healthcare and federal government customers. It expects the acquisition to add to earnings in fiscal 2012, but some analysts thought the price tag may have been too high.

Dell said on Monday it would pay $30 per share for Perot Systems, whose Friday's closing price was $17.91. Goldman Sachs advised Perot Systems on the transaction. Morgan Stanley advised Dell.

J P Morgan analyst Mark Moskowitz said the price is 1.4 times Perot Systems' sales, compared with HP's purchase of EDS for 0.6 times sales last year. That would make the acquisition a little expensive, although it was good for Dell to lessen its dependence on personal computers, he said.

"We do see the building block as being compelling, but the purchase price seems relatively rich," Moskowitz wrote in a research note.

Perot shares jumped 65 per cent to close at $29.56 while Dell shares fell 4.1 per cent to $16.01.

The deal comes as large technology companies expand into higher margin IT services to secure stable and recurring revenue as computer hardware becomes cheaper.

Dell is the world's No 2 maker of PCs, with roughly 60 per cent of its revenue coming from that market. The company has been trying to diversify its range of offerings, and services currently make up only around one-tenth of sales.

Kaufman Bros analyst Shaw Wu said Dell is finally taking a step to address some of its weaknesses, but it remains to be seen how much impact the deal will have as Dell's combined services offering would still be much smaller than its rivals.

"This still doesn't have quite the scale to compete, but it's also not so outrageous it will be difficult to integrate," Wu said.

The announcement marked the second time in as many years that Ross Perot-founded companies found themselves at the center of a major technology deal.

Last year, HP made its bold play in the services segment with the $13.2 billion purchase of EDS, which was founded by Ross Perot in 1962. HP is now the world's No. 1 PC maker and No. 2 IT services player, behind IBM.

The Perot family owns roughly 30 million shares of Perot Systems, or a 25 per cent stake. Ross Perot Jr., Perot Systems' chairman, will be considered for appointment to the Dell board after the deal closes.

FOCUSED ON HEALTHCARE, GOVERNMENT

Perot Systems specializes in providing business processes and technology consulting services, with more than a third of its 23,000 employees based in India. It estimates that it is the largest provider of IT services to hospitals, operating in roughly 1,000 around the world. Half its sales are from the healthcare sector, and a quarter in government services.

Forrester analyst Paul Roehrig said Dell's services offering has traditionally been tied to hardware support, but the company has been trying to shift into more managed services, which the Perot deal should help facilitate.

"It's a pretty solid deal. Dell needed more firepower in the services space, they get some great customers in some attractive verticals," he said.

On a combined basis, the two companies have posted services revenue of roughly $8 billion over the past four quarters.

Dell said the deal may open the door to the sale of Dell PCs to Perot's clients, but emphasized that the main target was the expansion in IT services.

"This acquisition makes great sense because of the obvious ways our businesses complement each other and enable us to grow profitably over time," Dell Chief Executive Michael Dell said.

The two companies spend a combined $4 billion in the areas they plan to integrate, and Dell hopes to achieve cost savings of about 6 per cent to 8 per cent, or $300 million over two years.

Dell has $12 billion in cash and short-term investments and said it continues to look at acquisitions. Earlier this year, Dell hired IBM's M&A chief, David Johnson. IBM has sued Johnson, saying he violated a non-compete agreement.

India's Infosys plans pay hikes in October - paper

MUMBAI, Sept 24 (Reuters) - India's second-largest software exporter Infosys Technologies (INFY.BO) plans to give pay hikes and promotions next month, the Economic Times reported on Thursday, citing a senior company official.

Infosys has begun a performance appraisal process, and joins rivals including Tata Consultancy Services (TCS.BO), Wipro (WIPR.BO) and Cognizant (CTSH.O) in lifting wage freezes as industry growth prospects improve, the paper said.

"Yes, we are giving hikes this October. It will happen across the board," the paper quoted Nandita Gurjar, Infosys' group head for human resources as saying.

Infosys, which counts Goldman Sachs (GS.N) and Philips Electronics (PHG.AS) among its clients, could not be immediately reached for comment by Reuters.

The company had skipped the promotion cycle in April as employee utilisation and billing rates were low, but a rise in utilisation rates has made it decide to reward staff, Gurjar told the paper. Infosys has a staff strength of more than 100,000.

Infosys's salaries bill is estimated at 45-46 percent of sales, the paper said. In July, Infosys forecast consolidated revenue to fall 3.1-4.6 percent to $4.45 billion to $4.52 billion in the year to March 2010, its first annual decline.

This month, Infosys Chief Operating Officer S.D. Shibulal told reporters that pressure for price cuts had eased, but the business environment remained challenging as clients were cautious in spending.[ID:nDEL453462] (Reporting by Prashant Mehra; Editing by Anshuman Daga)

Indian Office Hierarchy is Way Too Strong for the Modern World

I first came to India in 1988 with my wife on holiday. One thing I do remember very well is my experience at the airport. I was treated like a schoolboy — and kept in line by immigration officials who made sure we did not cross the line before we came forward for our passport!

The first thing that struck me when I came back to India for my Xerox posting five years ago, was that IGI (Indira Gandhi International) Airport was significantly different from my first trip. Though it is still not brilliant as an experience — there are still long queues for immigration. But they have definitely upgraded the airport and improved the process.

Image: Madhu Kapparath for Forbes India
Andrew Horne, Managing Director, Xerox India

I came to India at a fairly traumatic time for Xerox — in terms of the fact that there was no consistent leadership at the Indian subsidiary for five years. I came with a mindset that I would be here for at least five years. This was our fourth international stopover; I have worked in Hungary, Soviet Union and Egypt before this.

I came to India alone first. My family joined me a couple of months later. I have realised that social life improves dramatically once your spouse moves in because they have the time to network. You might network with work colleagues but you may not necessarily find friends there.

On the business front, I realised that the cost of compliance in India is very high. You are dealing with one state in most other markets. In India you are dealing with a federal government — central government and 28 different states. And if you invoice in all those states, you have to file tax returns and make sure you are compliant with all the regulations.

One more thing that took me time to understand was crores and lakhs! My mental arithmetic was dollars. I would struggle with my calculator trying to work things out. First I tried to resist it and I tried to talk dollars. I realised very quickly my audience didn’t understand what I was talking about.
I find there is a lot of emotion in the Indian culture, which is actually a good thing in the majority of cases. Sometimes fairly small issues can get blown out of control and people shout over something that can be resolved relatively easily. It’s not always a good thing, but the passion it brings to the workplace is actually impressive and very visible.

I saw a lot of our employees interpreted empowerment as being able to have the authority to take a decision. But it didn’t come with accountability. I found that quite difficult to deal with initially. I had to be careful to not suppress people from actually coming up with ideas and ask for empowerment. Yet I had to really teach employees that if they wanted empowerment, with it they had to accept the accountability that comes with it.

A number of sales decisions were made where the pricing wasn’t good for the company but there was a lot of excitement about the successful deal being closed. There was virtually no realisation that it wasn’t good for the company. When that was pointed out to the sales managers it was met with disbelief and demotivation. I used communication to change the way people thought of this.

The hierarchical structures in Indian offices are way too strong for the modern world. I see far too often people treating others with disrespect. When I first arrived here, there was a table in my office and I asked someone in my first line to help me carry it out of the room. He said, “Wait a minute”, and got on to his mobile phone and said something in Hindi. By this time, I had picked up the table myself and was carrying it out. Suddenly four office boys turned up and tried to wrestle this table from my hands.

A lot of foreigners would say there is a very me-me culture in India. There is no respect for a queue, for instance. I am not saying that the queue culture of the British is correct but that’s what we are used to. So you wait in line and someone just queue barges. People will drive into a gap and cause a jam rather than let someone else go first. You see that in the business environment in terms of wage demands.

On a scale of 1 to 10, I will rate India eight for expat friendliness. It’s very easy to get on here. No expat sits on the fence in India — they either love it or they hate it. I believe it’s a state of mind.

A year on, Satyam has 50% fewer staff

Declining numbers

From 53,000 in September 2008, the number fell to 28,000

About 7,000 in virtual pool

---

K. V. Kurmanath

Hyderabad, Sept. 22 Nearly one year after Satyam Computer Services prepared its second-quarter results in 2008, the number of employees at the crisis-hit company (now, Mahindra Satyam) is put at 28,000, including 4,000 in subsidiaries.

The number, however, excludes 7,000 employees who are still in the Virtual Pool Programme (VPP). The staff in VPP get some pay for a few months and would part ways with company later on. Apart from this, about 500 were put in the ‘corporate reserve’ after the new management did away with ‘redundancies’ in work.

This puts the total staff number at about half the 53,000 the company claimed to have had in September 2008. Unofficial figures put the total number some thousands fewer.

Ever since the Rs 7,136-crore fraud broke out in January 2009, the issue of the exact number of employees continues, with conflicting figures put out by different quarters.

While the company continued to harp on the September 2008 figure of 53,000, the CID probing the scam told a Hyderabad court that the number was inflated by at least 25 per cent, as Mr Ramalinga Raju had manipulated the books.

Though there was no official word on the number of employees Tech Mahindra took over, the Government-appointed board had maintained that there were about 45,000-48,000 in April 2009 when the company changed hands.

Month-wise figures

As of March 28, 2009, the standalone Satyam had 41,622 associates. The figures for the preceding three months ended December 31, 2008, and for January 31 and February 28, 2009, were 46,115, 45,049 and 44,120 respectively.

As of January 17, 2009, its subsidiaries had 4,088 employees, including 2,519 at Satyam BPO. As of February 28, the company’s key subsidiaries (Satyam BPO, Satyam Venture, Satyam China and Satyam Egypt) had 3,828 employees.

Many left, sacked

While a good number of them left the company in the first few months of the crisis, it is alleged that a significant number was sacked. “People are still either leaving or getting the marching orders,” a Mahindra Satyam executive, on condition of anonymity, said.

Though they took about 1,000 staff back from VPP, the fate of the remaining 7,000 and those in the ‘corporate reserve’ still hangs in the balance.

‘Bring it on’ initiative

The company, however, claimed that the worst is over and that there would be no more additions to the virtual pool. “Instead, we have started several initiatives such as ‘Bring It On’ to encourage talent,” the spokesperson said.

The talent recognition programmes included paid holiday packages for those who completed 10, 15 and 20 years of service, beginning October 1.

V-P of auto parts firm dies in attack by workers

Chennai: Roy George, vice president (human resource) in the Coimbatore-based Pricol Ltd, died on Tuesday, a day after allegedly being attacked by company workers. Nine workers have been arrested for his death.

The Rs 633-crore turnover Pricol is a leading auto component manufacturer.

Pricol was afflicted by labour problems for some time. The issue came to a boil on Monday when the company dismissed around 35 workers in one of its factories near Coimbatore.

Enraged by the news, a group of workers allegedly attacked the company's Plant I at Perianaickenpalayam, damaging computers, glass panels and other furniture.

Officials who tried to intervene were allegedly attacked, and George was hit on the head. George, 46, was admitted to a Coimbatore hospital with serious injuries. He succumbed to his injuries Tuesday.

According to the Coimbatore police, four employees--three male and one female--were injured in the attack, including George.

While three were admitted to hospital, one was treated as an outpatient Monday.

According to officials, the company does not have any immediate plans to close down the plant.

Meanwhile, shocked over the death, industry lobby Confederation of Indian Industry (CII), Southern Region, strongly condemned the attack on George.

In a statement here, C.R. Swaminathan, chairman CII Southern Region, said any labour issue would need to be resolved through consensus only and not through violence.

Concerned with the increasing incidents of labour unrest, Swaminathan urged the Tamil Nadu government to take firm action against those who had taken law in their hands.

In his message, C.K. Ranganathan, chairman, CII-Tamil Nadu, appealed to the state government for its intervention in protecting the interests of labour and management.

When contacted by IANS, state Labour Minister T.M. Anbarasan was not available for comment on the increasing labour unrest in the state.

IT majors now in race for low-value US state deals

MUMBAI/BANGALORE: Infosys Technologies, Wipro and HCL Technologies are among the software service providers that are laying foundation for the next round of multi-million dollar orders from the big US corporations, by pitching for low-value, but politically important US state governments’ orders. Infosys, which counts JP Morgan and Morgan Stanley as clients for its services, bids for Arizona Public Service’s (APS) 400 positions, who work in its information-services department, and another 400 or so contractors to raise the staff strength for undisclosed amount. Nine other US states, some from where politicians opposed offshoring work, are looking to outsource their healthcare operations worth over $2 billion, said Wipro chief strategy officer KR Lakshminarayana, and the company hopes to get a slice of these. “The discussions are not about offshore outsourcing, but more about working with newer outsourcing vendors, who can deliver locally and keep the jobs here at lower rates,” said a senior executive at one of the Bangalore-based tech firms exploring this opportunity. Many US states such as Missouri, Virginia and Arizona, which are battling falling revenues amid the worst economic slump in their country since the 1930s, are attempting to reduce costs and at the same time want to increase employment opportunities for their citizens. So, they are including clauses such as recruitment of minimum number of staff from their states. Indian companies, which were used to contracts of hundreds of million-dollars at one go, are bidding for these low-value orders since their traditional clients are cutting down on technology spending and at the same time provides visibility, which would be helpful in getting big orders when tech spending recovers. “The marketing muscle that comes from such contracts is huge and working with the US state governments send out a signal of importance to other customers,” said Siddharth Pai, managing director of outsourcing advisory firm TPI’s India unit. “For the Indian IT companies this is not a core business, but it creates a halo effect,” he added. While the global government IT outsourcing market is estimated to be around $100 billion, experts tracking the sector said the US state governments could outsource projects worth up to $5-6 billion this year. States, which in the past opposed the outsourcing of work to Indian companies by the likes of Microsoft and Citigroup, are now turning to the same Indian companies, as their mission now is in line with that of the companies cut costs. Rodney Nelsestuen of US-based research firm TowerGroup, said state governments in the US are suffering from a reduction in tax revenue due tohigh unemployment and lower spending on taxable items by the US consumers. “Significant budget cuts are making it difficult for states to maintain the level of services that residents expect. Outsourcing has become an option that governments are looking at,” he added. The orders from these state governments are for maintenance of records, accounts, healthcare and other administrative jobs, said a consulting firm engaged with a few governments. Indian companies are not worried about the fact that they may be at a disadvantage to their US peers such as IBM and Hewlett-Packard, which are more familiar with the functioning of the local governments. “As long as you have the competency and ability to deliver what they want and from where they want, you are as competitive as your local peer,” said Wipro’s Mr Lakshminarayana. Wipro already has a $407-million deal from the state of Missouri for application, maintenance and development (AMD) and BPO work for the state’s healthcare division, which it bagged in December 2007. “They always ask us how many local jobs will we create and that sometimes is an important factor,” he added. TCS, Wipro, Infosys and Cognizant are among a few vendors, who have already hired local citizens. TCS has hired 120 people for its centre in Cincinnati. “The level of success that India-based outsourcers will have in the future rests on their ability to add local talent, their ability to be viewed as global service companies and not just India-centric, and how quickly they assimilate government requirements – something India-based companies should be good at given their outsourcing history on a global and multi-industry scale,” said Mr Nelsestuen.

Vodafone to move more jobs to India

Mobile services provider Vodafone Hutchison has announced offshoring a total of 450 call centre jobs from Melbourne to India and Tasmania.

The decision comes three months after Vodafone Australia Ltd and Hutchison 3G Australia formed a 50:50 joint venture.

A spokesman for Vodafone Hutchison Australia, who earlier flagged a total of 380 job cuts, said the company would transfer an unspecified number of positions to a call centre in Mumbai and about 100 jobs to Kingston , Tasmania.

Service Stream, the company that was running Vodafone contract confirmed the telecom operator's plans to end the contract employing 450 in customer service and support roles starting in October to February, in a move that will shift the positions to Vodafone offices in India and Tasmania.

Service Stream acting managing director Michael Doery said the company would try to find new roles for the affected employees, but was unlikely to accommodate them.

"We're trying to do the right thing for our staff but not give them false expectations," he was quoted as saying in 'The Age'.

2 Indian families racially attacked in Northern Ireland

Two Indian families in Northern Ireland have been forced to relocate to another part of the city Portadown after becoming the target of racist attacks.

One of the two families, which hails from Kerala, includes two children. They were targeted in what the local police described as hate crimes in the Killicomaine area.

The father, who did not want to be identified, is a care worker in a residential home. He was at home with his children when a downstairs window at the front of the house was smashed just before midnight.

His wife, a nurse at the Craigavon Area Hospital, was on night duty at the time of the recent attack, reports from Portadown said. In another incident in the same town, three windows were broken in a home occupied by an Indian family. The house was vacated over the weekend and police believe the two incidents were caused by the same people.

"We were upstairs at the time and a stone smashed through the window. We cannot understand it. We came here from the state of Kerala in South India for a better life and we found most people friendly. But now we cannot stay in this house. It was very frightening," he told the local media.

The man said: "We hope to move to another part of Portadown as our jobs are here and we enjoy our work. We have been so frightened by the attack. We have been living here for six months and loved Portadown, but we cannot subject our two children to this sort of racist attack.

"We believe it was young people who are not typical of our neighbours, but we do not want our children to be the victims of such hatred."

Councillor Kenneth Twyble, a representative for the area, said, "It really is a mindless action on a hard-working family that is contributing much to the community. There is no room for this sort of racism anywhere and I appeal for these people to stop."

South Belfast Alliance MLA Anna Lo, a champion for the migrant population of Northern Ireland, said she is deeply worried that the families were leaving the estates following the attacks.

She added: "We cannot have another situation in which people feel they cannot stay in their homes because of fear and intimidation. We must not have a repeat of the type of story that brought shame on Northern Ireland early this year.

"It is despicable to think that two children were in the house when one of the attacks took place and one can only imagine how traumatic this must have been. I would call on police to step up their patrols in the area to provide reassurance to these families at this extremely difficult time."

Mid-size IT companies to ring in pay hikes

BANGALORE: After software giant Wipro lifted freeze on promotions and hikes, although selectively, mid-sized technology firms like MphasiS-EDS, Sonata Software and Symphony Services are also planning to increase salaries and give bonus.

IT services firm MphasiS, which recently bagged new outsourcing contracts, has announced a recompense bonus for its staff which the company feels is possibly an innovative compensation model. “For good performers, the bonus can be 15-25% higher than the average pay hike,” MphasiS chief human resources officer Elango R said.

Recompense bonus will compensate for the salary freeze which was introduced in early 2009. “It is a one-time adjustment in the form of a bonus to reward employees for their commitment and contribution,” said Mr Elango.

The recompense bonus is guaranteed up to the third quarter and is linked to the company’s overall performance and that of the business units as well as to the performance of employees, which includes the individual appraisal rating, for the fiscal year ending 2009.

“If in the fourth quarter, the company achieves its targets again, the bonus size will get bigger. In case they do not meet targets, the bonus will still be paid out on a pro-rata basis based on the third quarter results,” Mr Elango pointed out. He said this bonus was possible not only by winning new businesses, but also through
operational efficiencies.

Offshore product firm Symphony Services is planning to hike salaries for all its employees by 7-8% once its budget is ready. “We are noticing that other companies are also contemplating hikes of 5-8%. However, companies are keeping a watch on the overall market,” C Mahalingam, executive vice-president and chief people officer of Symphony Services, said.

Like MphasiS, Sonata Software, too, has introduced a new package called ‘company-linked performance pay’. Last year, the firm had dropped annual incentives and appraisals due to the economic meltdown. “But this year, there will be appraisals, salary increments between 7-10% and incentives based on performance because the market is getting better and Sonata is getting projects from the UAE, the US and the UK,” said a person privy to the developments.

These changes come at a time when layoffs and salary cuts have become a rather controversial method to control cost. Experts like Ashok Reddy, managing partner and co-founder of staffing company, Teamlease, said business is picking up and companies are increasing salaries based on employee performance, revenue and profit rise. “Many companies are restructuring pay scales or cost-to-company compensations. And attrition rate will also grow as more jobs are coming in,” said Mr Reddy.

Going forward, mid-sized companies will explore more innovative compensation models that will be based more on performance, experts said. To boot, apart from the bonus plan, MphasiS has announced a quarterly performance-linked pay model for FY10. “Effective November, a percentage of annual fixed and base salary will be converted to variable which will be paid based on quarterly performance of the company and the business unit,” Mr Elango said.