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MphasiS may cut pay packets

Bibhu Ranjan Mishra & Ravi Menon | December 27, 2008 01:40 IST

Come January, employees of IT services company MphasiS could be in for an off-schedule New Year surprise -- a 20-40 per cent salary cut across the board. This could be on the heels of a third party employee verification program presently being carried out at the company. Industry and company sources said that while a pay cut of roughly 20 per cent is planned across the board at MphasiS, some senior level employees could suffer pay cuts as high as 40-45 per cent.

The employee verification programme will help the company weed out 'non-performers' and fraudulent resume holders from the employee ranks, sources said. It is also reliably learnt that the decision to implement the pay cut has been taken at the apex level, and is likely to be disclosed to the employees in January.

The revised salaries are expected to be announced in the month of February (effective January).

The company, which in recent times has seen the exit of most of its senior level employees including CEO Jeya Kumar, is also said to be working on a restructuring plan which might affect 600 people.

This is part of its ongoing structural alignment with HP, said sources familiar with developments at the Jerry Rao-founded company. IT giant HP had acquired EDS, a majority stakeholder in MphasiS, this year.

Bangalore-based MphasiS employs close to 28,000 employees.

In the last three months, after the process of the company's integration with HP intensified, MphasiS witnessed a good degree of voluntary attrition when many employees quit the company fearing for their future -- many had been moved to projects where they faced domain skills mismatches. Involuntary attritions, for their part, have been the result of the employee verification program being conducted over the last two months by a third party agency roped in by MphasiS.

A former employee who had worked with the company for over five years said that he was asked to leave without notice on the plea that his resume contained inconsistencies. "No explanation or details leading to how they formed their conclusions, just a terse statement from the HR department about inconsistencies in my resume, and a requirement to file my resignation post-haste," he said.

A questionnaire sent to the company's HR department on these issues a few days ago remained unanswered. When contacted, an MphasiS spokesperson responded that the company does not comment on rumours and speculation. "We provide open and transparent communications to our employees routinely and to our analyst community quarterly," the spokesperson contended.

The integration with HP appears to have exacerbated employee apprehensions on rightsizing.

"Many senior level employees in the company (MphasiS) have left during the last three months, some have joined our company. The worst part is that the company is not filling up vacant posts via replacements," said the CEO of a Bangalore-based company on condition of anonymity.

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