Tech Mahindra, after gaining control over the troubled IT major Satyam Computer Services, seems to be getting straight to business.
The company intends to downsize operations beginning with the business process outsourcing arm Satyam BPO (formerly called Nipuna).
Sources in the company said the layoffs will begin with the support department. “The billable staff is not going to be disturbed now. It is the support staff that is likely to exit,” the source said.
Satyam BPO has over 3,000 associates and the ratio of billable staff and the support staff is about 35:1. “The target is to make it 80:1. This means a major shake-up in the BPO arm,” the source said.
About 60% of the support staff face the axe.
Tech Mahindra has decided to use Satyam’s existing marketing, HR and other support functionaries for the BPO too instead of having a separate set-up.
Sources among employees said that there are about 80 people in the HR department alone and about 60 of them are likely to go.
“Particularly the support functions in both Satyam BPO and Satyam are obscenely overstaffed. Any effort to resurrect Satyam would happen only by rationalising these functions,” the source said.
The days of Tech Mahindra moving the spotlight to Satyam too, are not far, the source said. “Informally, there would be a target to save at least $200 million by way of cost cutting. This implies massive layoffs. It is a question of when now and not if,” the source said.
Though the senior associates of Satyam felt that there is no immediate threat, particularly to the billable associates, the rationalisation (read layoffs) is imminent. “What we get to hear from the senior leaders in the company is that the layoffs would be in the excess of 10,000. We still don’t
know if they are going to happen at a stroke or in a phased manner. It is a fact that the new management is keen on financial discipline and cutting the flab. For some mysterious reasons, the old dispensation has created a lot of buffer and there are several functions where the number of employees is in excess
