The impact of the global meltdown has forced India's second largest IT bellwether Infosys Technologies to freeze wage hikes and hiring in new fiscal 2009-10.
The company has told its employees that there won't be wage hikes for the financial year ending July 31, 2009, due to tight demand in the US and Europe, declining volumes and the need to further tighten expenses across business divisions. In a harsher step, the company has slashed retainer bonus, which averages 10 per cent of an employee's salary, from April 1. Travel allowance has been sharply reduced, if not curbed, in most cases.
Global clients continue to keep purse strings tight and very few deals are coming from traditionally large markets like the Americas and Europe, which account for almost 80 per cent of revenues of most Indian IT firms. The billing rates of most Indian IT firms in the third quarter were either flat or were cut, compared with the second quarter of the current financial year.
The last couple of years of frenzied activity in the MRO space made many believe that time is not far when umpteen number of MROs will start servicing narrow and wide-bodied aircraft on the Indian soil like motor garages. While many of the projects announced over the last couple of years have not seen the light of the day, Aviation firm AirWorks which launched India's first MRO in airline segment at Hosur (Tamil Nadu) is yet to land their first anchor customer.
The IT and BPO services provider's CEO says there are no salary cuts yet, but can't say what will happen three months ahead. According to MphasiS' (interim) Chief Financial Officer, Susanto Banerjee, the company has already been working to so convert its fixed costs, "progressively over the quarters." It is also looking at fixed costs involving infrastructure. "We are thinking of having our future infrastructure on pay-per-use basis," he said.
The global financial slowdown, perhaps for the first time in recent years, has forced premier B-school IIM-B to extend the placement process for the second week, which otherwise would have been completed in the first week itself. Industry sources say this is the problem with most other IIMs as there is not much of demand for the elite management graduates this year.
The Bangalore-headquartered company is believed to be evaluating two-three companies, which are in the revenue bracket of $100-200 million to eliminate some gaps that exist in its services offerings and increase focus on certain verticals, which have been least affected in the midst of the economic slowdown. It's reliably learnt that the company is looking at healthcare and energy and utilities as the two major areas for possible acquisitions.
The Bangalore-headquartered company will henceforth focus on tactical advertisements, which will generate immediate sales. Titan's advertising budget this year is estimated to be about Rs 180 crore. In the current financial year, the company has already spent Rs 160 crore on advertising. Though the company has not made any cut on the ad budget yet, it expects that the adspend will drop.
Former India cricket captain, Kapil Dev Nikanj,on Monday entered into a marketing agreement with South Africa-based Enviro-Light Technologies, promoted by former South African captain Clive Rice to launch eco-friendly street lights in India.
In an effort to slash hiring and increase efficiency, Wipro Technologies, one of the leading IT companies in the country, is training its employees to turn into a multi-skilled workforce.
For the first time in the history of Indian space research, a satellite developed by a university in India will be launched by the Indian Space Research Institute (Isro) during the next flight of the Polar Satellite Launch Vehicle (PSLV). Tentatively scheduled for launch in March-April this year, the vehicle will carry a small remote-sensing satellite completely developed and fabricated by Chennai-based Anna University, sources in Isro said.
Wipro, the Bangalore-based business conglomerate with interests in IT and FMCG, said it has succeeded in "convincing" one of its recently-won international clients, Australia's Origin Energy, about the circumstances under which the World Bank had imposed a ban on the company
India's second-largest IT services provider Infosys Technologies has hired recruitment services provider MaFoi to help its employees who fail to pass the final test to gain employment elsewhere.
Other than the involuntary attrition, the company has reported voluntary attrition of 11.9 per cent in the third quarter. This has resulted in a drop in the number of employees in the third quarter for the second time in the current financial year. The company started seriously looking at issues such as poor performance and fudged employment details in the second quarter of FY09 when the rate of voluntary attrition suddenly went up from just 0.5 per cent to 2.5 per cent.
Even as the buzz around Vivel Paul's candidature as CEO is still doing the rounds at Satyam Computer Services, insiders say the government is considering a person who was an integral part of the company till three months ago.
The JV TACO Sasken Automotive Electronics has been called off and over 100 people working for the JV have been asked to quit. In January 2007, Sasken and Tata AutoComp Systems had formed the JV with a focus on automotive electronics products in the areas of telematics, infotainment and occupant convenience. However sources say that even two years after its formation, the JV could hardly make any progress.
With industry buckling under the impact of global meltdown, Indian IT outsourcing firms are adopting a 'zero tolerance' policy on fraudsters who have managed to get IT jobs using fake resumes.
In yet another example by an Indian corporate to become cost-sensitive, IT bellweather Infosys Technologies is asking all its employees to go in for a one-time cost savings of $10 each. This initiative is expected to help the company, which has over 100,000 people on its rolls, to incur a cost saving of $1 million (around Rs 5 crore), which is a 'substantial amount' according to the company.
On Wednesday, the employees of Satyam lost close to Rs 221 crore (Rs 2.21 billion) after investors dumped the stock. At the end of the September quarter, Satyam employees were holding 5.9 million employee stock options. The unfortunate drubbing of the Satyam stock has raised serious questions about the attractiveness of the stocks held by the employees, which may be affected by any 'uncalled for' action by the company.
The industry, which is also passing through one of its lows in the wake of the ongoing global financial downturn, expects that clients will now be more cautious, despite Satyam's case being an isolated one.
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