Axe to fall on Satyam staff

Axe to fall on Satyam staff

Satyam Compu-ters is all set face the inevitable: a drastic cost-cutting exercise, which includes layoff of 5,000-strong non-billable staff. Tech Mahindra, the new owner of the fraud-hit IT major, has prescribed a $200-million cost-cutting pill to get Satyam back to financial health. According sources in the company, Tech Mahindra would place its cost-cutting measures, which includes a three phased layoff plan, before the Satyam board on May 15 for approval. In the first phase, the layoffs will be effected in administration, human resource, and marketing. Support staff will face the axe in the second phase and the bench strength would be pruned in the final leg. The first to be hit would be the support staff in the Satyam BPO, which would see layoffs this month. “Some of the employees are already on the bench, who will be laid off immediately. The new management is also planning to entrust Satyam BPO’s HR and marketing functions to Satyam team and wind up Satyam BPO support staff,” the sources said. The company has an ‘obscene’ ratio of support staff against the productive staff. “At present, this is 1:35 in Satyam, but the industry is now running at 1:80 ratio,” said the source adding that surplus non-billable staff has already been identified. Figures available with Satyam indicate that nearly 3,000 employees are on the bench on different projects as nearly 15-20 clients have cut short their operations in business processing. “This has necessitated fresh cost-cutting measures,” a Satyam employee said.