Bangalore: As the effects of the economic slowdown begin to wear out, India’s information technology firms are seeing more demand for building high-value applications from customers upgrading or maintaining their business software.
Enterprise resource planning (ERP), or business software, is a high-margin segment that includes consulting as a key component and commands at least 40% higher billing rates than plain-vanilla applications and development and maintenance services. Such software is typically sold and maintained by firms such as SAP AG and Oracle Corp. Indian firms began acquiring ERP capabilities only in recent years to enter the big league of companies such as International Business Machines Corp. (IBM) and Accenture Ltd.
For instance, Infosys Technologies Ltd and HCL Technologies Ltd, India’s second and fifth largest software firms, fought a bid last year to buy British ERP implementation and consulting firm Axon Group Plc HCL won.
The impetus came during the downturn, when firms in the US and Europe, the biggest markets for Indian IT firms, slashed technology budgets and spent a bare minimum on the so-called lights-on projects for maintaining existing IT infrastructure, to keep their businesses running.
Now, with a recovery in sight, firms such as British oil explorer BP Plc. and power equipment maker ABB group are again upgrading their business applications but prefer outsourcing the work to firms in low-cost countries such as India, analysts said.
Mint could not independently verify ERP contracts won by Indian firms.
“Clients are becoming more open to discretionary IT spending, especially in areas such as enterprise resource planning, in which deep spending cuts have already happened,” Harmendra Gandhi and Pinku Pappan, analysts with brokerage Nomura Financial Advisory and Securities (India) Pvt. Ltd, wrote in a 10 September report to clients.
By discretionary spending, the analysts are referring to the money that customers keep aside to spend over their planned IT budget.
“Customers are also talking about some transformation of deals, apart from offshoring support and maintenance work. Thus, the propensity to spend out of the 2009 Budget is much more now compared with that a quarter ago,” Gandhi and Pappan said.
The shift to Indian firms was also prompted by price increases at their regular vendors.
Germany’s SAP last year raised its annual support costs to 22% of the licence fee from 17% earlier, saying this would bring down the total cost of ownership of the licence for customers.
Firms had not factored in a hike in maintenance fee during the recession and “are exploring outsourcing to Indian vendors, who can maintain at half the cost, but with the risk of losing support on upgrades from the vendor,” said Asheesh Raina, a principal research analyst at Gartner Inc. “Indian companies have also been able to demonstrate maturity in offering support.”
Spending on business software was the lowest in the five years to 2009, but is expected to pick up in 2010, Raina said.
Firms such as Wipro Ltd, HCL, Cognizant Technology Solutions Ltd and even smaller companies such as Defiance Technologies Pvt. Ltd, the IT services unit of the Hinduja group, say customers are looking to improve efficiency and integrate their business software with their core processes, and not just to cut costs. But it does help that Indian ERP firms are cheaper by at least a third than Accenture or IBM.
“Saving costs and capital continues to be the most important thing clients are discussing,” said Sangita Singh, head of enterprise application services, or EAS, for Wipro. The segment contributed a third out of the 26 customers that Wipro added in the first quarter ended June.
“You don’t have many companies spending $100-200 million (Rs482-964 crore) on new licences. It may be in the range of $50-70 million. The implementation business is three to four times on licences,” Singh said.
HCL earns nearly a quarter of its overall revenue from business software projects. EAS projects accounted for 23.6% of its fourth quarter revenue of Rs2,908 crore, up from 10.8% a year ago.
Showing posts with label HCL tech. Show all posts
Showing posts with label HCL tech. Show all posts
Wednesday, September 23, 2009
Monday, September 14, 2009
Techie Sues Airtel
Bangalore: A techie from Bangalore has sued Airtel for Rs. 20 crores. Airtel had given wrong information to the Police which forced the techie to go to jail. "I have spent 50 horrible days in jail. You can't measure the trauma which I went through, my family went through," says Lakshman Kailash, a 28 year old engineer to CNN-IBN.
Kailash was successful software engineer with HCL and was working in Bangalore. Two years ago, Pune Police team in Bangalore had arrested him for 'defaming Shivaji' in a picture he was supposed to have put up on Orkut. Police was fed with wrong IP address by Airtel, who searched for the IP for two days. The police traced up the IP and arrested Kailash and did not let him go even after the police claimed to have caught the real culprits about two weeks after his arrest.
Maharashtra Human Rights Commission asked Airtel to cough up Rs. 2 lakh as compensation but Airtel did not do so. Now, its top executives have been summoned by a magistrate court in Bangalore. "Its a small amount for them and I really don't understand why they are not paying up. They have to follow court orders. They are citizens of India, whether they think they are guilty or not is secondary," says Kailash.
Since Airtel has not paid any kind of compensation so far, Kailash has moved to National Consumer Disputes Forum and now seeks a compensation of Rs. 20 crores. "You can't scale those horrible moments in money. I feel it's a less amount with respect to the trauma I went through because I have to carry it throughout my life," says Kailash.
Kailash was successful software engineer with HCL and was working in Bangalore. Two years ago, Pune Police team in Bangalore had arrested him for 'defaming Shivaji' in a picture he was supposed to have put up on Orkut. Police was fed with wrong IP address by Airtel, who searched for the IP for two days. The police traced up the IP and arrested Kailash and did not let him go even after the police claimed to have caught the real culprits about two weeks after his arrest.
Maharashtra Human Rights Commission asked Airtel to cough up Rs. 2 lakh as compensation but Airtel did not do so. Now, its top executives have been summoned by a magistrate court in Bangalore. "Its a small amount for them and I really don't understand why they are not paying up. They have to follow court orders. They are citizens of India, whether they think they are guilty or not is secondary," says Kailash.
Since Airtel has not paid any kind of compensation so far, Kailash has moved to National Consumer Disputes Forum and now seeks a compensation of Rs. 20 crores. "You can't scale those horrible moments in money. I feel it's a less amount with respect to the trauma I went through because I have to carry it throughout my life," says Kailash.
Saturday, August 15, 2009
Indian Companies Among Top Ten IT Infrastructure Outsourcers
Indian outsourcing companies figure among the top ten worldwide in IT infrastructure services, reflecting the growing appeal of offshore delivery of these services, according to outsourcing consultancy Technology Partners International (TPI).
Indian outsourcers figured in the top ten by value of contracts closed in the first half of this year, not only in their traditionally strong area of application development and maintenance (ADM), but also in infrastructure services, Siddharth Pai, a partner at TPI, said on Thursday.
That Indian companies such as HCL Technologies and Wipro have made it to the top ten in infrastructure services, a relatively new area in IT services for Indian outsourcers, suggests that customers are now considering seriously the option of remote delivery of these services from offshore locations like India, Pai said.
Indian companies figured in the top ten last year in ADM but not in infrastructure services, according to TPI data.
TPI released its index this week covering the global commercial outsourcing market in the second quarter and the first half of this year.
The market for outsourcing has shrunk to US$40.2 billion in contracts in the first half of this year from $51.5 billion in the first half of last year. TPI monitors contracts of a value of $25 million and above.
It is unlikely that the outsourcing market this year will grow to last year's level of $93.1 billion, and is more likely to end this year with total contracts of less than $80 billion, Pai said.
Top Indian outsourcers have reported flat or declining revenue in the quarter ended June 30. Infosys, India's second largest outsourcer, has forecast that revenue for its fiscal year ending March 31, 2010 will decline by 3.1 to 4.6 percent over revenue in the previous year.
Indian outsourcers figured in the top ten by value of contracts closed in the first half of this year, not only in their traditionally strong area of application development and maintenance (ADM), but also in infrastructure services, Siddharth Pai, a partner at TPI, said on Thursday.
That Indian companies such as HCL Technologies and Wipro have made it to the top ten in infrastructure services, a relatively new area in IT services for Indian outsourcers, suggests that customers are now considering seriously the option of remote delivery of these services from offshore locations like India, Pai said.
Indian companies figured in the top ten last year in ADM but not in infrastructure services, according to TPI data.
TPI released its index this week covering the global commercial outsourcing market in the second quarter and the first half of this year.
The market for outsourcing has shrunk to US$40.2 billion in contracts in the first half of this year from $51.5 billion in the first half of last year. TPI monitors contracts of a value of $25 million and above.
It is unlikely that the outsourcing market this year will grow to last year's level of $93.1 billion, and is more likely to end this year with total contracts of less than $80 billion, Pai said.
Top Indian outsourcers have reported flat or declining revenue in the quarter ended June 30. Infosys, India's second largest outsourcer, has forecast that revenue for its fiscal year ending March 31, 2010 will decline by 3.1 to 4.6 percent over revenue in the previous year.
Friday, August 7, 2009
MindTree Cuts Pay
Bangalore: Mindtree has been hit by global economic slowdown as it has cut salaries of some employees by 15 percent. These employees belong to research and development services unit (R&D) and had experience between one to seven years. "(Employee) utilization in the division has now fallen to 60 percent, so we have reduced pay by 15 percent for some staff. It is necessitated by the fact that utilization has been below the expected level," said Puneet Jetli, Senior Vice President and Head, Global People Function, Mindtree to SiliconIndia in a telephonic interview. The cut is applicable from August 1, 2009, and affect about 150-200 people out of the total 7800 employees.
Employees facing this decision are the ones who have been not on project for more than 30 days. Out of the six business unit in Mindtree, R&D unit has been hit hard due to economic slowdown. "R&D consists of customers who build product in technology sector. These customers are people who revolve around semiconductor industry. Semiconductor industry has been worst hit due to recession," says Jetli, who believes that in times like these their customer don't make many products, that's the reason why only R&D unit has been hit.
Jetli also added that there are two ways an employee facing pay cut can start getting his salary back. One is if they themselves start getting assigned to customer projects and the second is if the R&D unit crosses 65 percent utilization.
The company has reported revenue of Rs. 3.05 billion, up 36 percent from a year earlier. It also posted a net profit of Rs. 567.3 million in the June quarter. But in the quarter ended June 30, R&D contributed only 14.1 percent of Mindtree's revenue as compared to 17.7 percent in the previous quarter.
Many Indian software companies have been hit in past few quarters and customers in U.S. and Europe are looking for much cheaper options for product and services. Already, Tata Consultancy Services (TCS) and Infosys have reported a decline in staff numbers for the June quarter. Mahindra Satyam and Hexaware Technologies have asked few employees who are not working on active assignments to take a long leave. "We did not want to send people to virtual pool or layoff. So this is just the short term process. Some organizations have put their employees on 40-50 percent salary. We did not want to take any such drastic action," added Jetli.
If the situation does not improve in the R&D unit it is possible that number of people facing a pay cut might increase. At the company's first quarter results announcement last month, MindTree Chief Executive Krishnakumar Natarajan had predicted that the company expects the growth to be muted in the next few quarters. This move by Mindtree proves that the company might have to make many changes to fight and adapt to the slowdown in Indian IT sector.
Source: Silicon India
Employees facing this decision are the ones who have been not on project for more than 30 days. Out of the six business unit in Mindtree, R&D unit has been hit hard due to economic slowdown. "R&D consists of customers who build product in technology sector. These customers are people who revolve around semiconductor industry. Semiconductor industry has been worst hit due to recession," says Jetli, who believes that in times like these their customer don't make many products, that's the reason why only R&D unit has been hit.
Jetli also added that there are two ways an employee facing pay cut can start getting his salary back. One is if they themselves start getting assigned to customer projects and the second is if the R&D unit crosses 65 percent utilization.
The company has reported revenue of Rs. 3.05 billion, up 36 percent from a year earlier. It also posted a net profit of Rs. 567.3 million in the June quarter. But in the quarter ended June 30, R&D contributed only 14.1 percent of Mindtree's revenue as compared to 17.7 percent in the previous quarter.
Many Indian software companies have been hit in past few quarters and customers in U.S. and Europe are looking for much cheaper options for product and services. Already, Tata Consultancy Services (TCS) and Infosys have reported a decline in staff numbers for the June quarter. Mahindra Satyam and Hexaware Technologies have asked few employees who are not working on active assignments to take a long leave. "We did not want to send people to virtual pool or layoff. So this is just the short term process. Some organizations have put their employees on 40-50 percent salary. We did not want to take any such drastic action," added Jetli.
If the situation does not improve in the R&D unit it is possible that number of people facing a pay cut might increase. At the company's first quarter results announcement last month, MindTree Chief Executive Krishnakumar Natarajan had predicted that the company expects the growth to be muted in the next few quarters. This move by Mindtree proves that the company might have to make many changes to fight and adapt to the slowdown in Indian IT sector.
Source: Silicon India
Saturday, August 1, 2009
British Telecom to cut 2,750 call center jobs in India
British telecom giant BT will transfer more than 2,000 call centre jobs from India back to the UK, chief executive Ian Livingston revealed during the firm's annual general meeting at the Barbican Centre in London.
BT will transfer at least 2,000 jobs to Britain from India, where it employs 11,000 customer service staff. However, the eventual number of job cuts in call centres will be closer to 2,750, representing half the group's 5,500 call-centre staff in India, the Times reported on Thursday.
The firm, however, insisted that its move had nothing to do with the quality of service offered in India. "This is not about customer service, as the service in our operations around the globe is of very similar standards. It is about the effective deployment of our resources. We have opportunities to bring some activities, carried out by our partners, back from outside the UK to permanent BT employees in the UK who are skilled to do this work," a company spokesperson said.
The pullout of jobs from India would be phased with no specific timescale set for the transfer of jobs. "This is part of a long-term strategy to reduce costs and the dependency on third parties globally," the spokesperson added.
Industry watchers in Bengaluru said the move would keep the local population, struggling with a deep recession, happy. Unemployment in the UK is at its highest in the last one decade and salaries have dropped - so has India's cost advantage.
Managing partner of consulting firm Browne & Mohan Dr. T.R. Madan Mohan says that while Indian firms charge about $18 per resource, in the UK charges have dropped to $22-23 per resource from $33 in December last year. "However, technology work, which requires high skills, may continue to be outsourced. BT had axed 6000 jobs last year in the UK and much of this work came to Tech Mahindra and HCL," he says.
The firm, he adds, was looking at more high-end outsourcing and may consider players such as Patni, HCL, Infosys, and Subex.
The primary hit for Indian IT services vendors - mostly the top five players - will come when low-end work contracts are not renewed next year, says engagement manager with Zinnov Karthik Ananth. A spokesperson said that by next year, approximately 4,000 less people will be contracted in India than was the case in early 2008.
"The BT Global Business Services division, which mainly offshored to APAC countries, has been a loss making unit. The rationalisation of headcount would be to cut costs and scale down operations," he says.
In May, BT had announced that it will cut 15,000 more jobs this year after it reported a pre-tax loss of £1.34bn for the 12 months till March 31.The telecom giant had cut 15,000 jobs last year.
Last year, the majority of the job cuts were in the area of indirect labour, including agency, contractors, subcontractors and offshore workers, including those based in India. The telecom giant has a global workforce of 150,000 and employs 90,000 directly in the UK.
The firm has steered clear of compulsory layoffs in Britain and hoped to cut the jobs through natural wastage and voluntary redundancies.
Source: Asian Age
BT will transfer at least 2,000 jobs to Britain from India, where it employs 11,000 customer service staff. However, the eventual number of job cuts in call centres will be closer to 2,750, representing half the group's 5,500 call-centre staff in India, the Times reported on Thursday.
The firm, however, insisted that its move had nothing to do with the quality of service offered in India. "This is not about customer service, as the service in our operations around the globe is of very similar standards. It is about the effective deployment of our resources. We have opportunities to bring some activities, carried out by our partners, back from outside the UK to permanent BT employees in the UK who are skilled to do this work," a company spokesperson said.
The pullout of jobs from India would be phased with no specific timescale set for the transfer of jobs. "This is part of a long-term strategy to reduce costs and the dependency on third parties globally," the spokesperson added.
Industry watchers in Bengaluru said the move would keep the local population, struggling with a deep recession, happy. Unemployment in the UK is at its highest in the last one decade and salaries have dropped - so has India's cost advantage.
Managing partner of consulting firm Browne & Mohan Dr. T.R. Madan Mohan says that while Indian firms charge about $18 per resource, in the UK charges have dropped to $22-23 per resource from $33 in December last year. "However, technology work, which requires high skills, may continue to be outsourced. BT had axed 6000 jobs last year in the UK and much of this work came to Tech Mahindra and HCL," he says.
The firm, he adds, was looking at more high-end outsourcing and may consider players such as Patni, HCL, Infosys, and Subex.
The primary hit for Indian IT services vendors - mostly the top five players - will come when low-end work contracts are not renewed next year, says engagement manager with Zinnov Karthik Ananth. A spokesperson said that by next year, approximately 4,000 less people will be contracted in India than was the case in early 2008.
"The BT Global Business Services division, which mainly offshored to APAC countries, has been a loss making unit. The rationalisation of headcount would be to cut costs and scale down operations," he says.
In May, BT had announced that it will cut 15,000 more jobs this year after it reported a pre-tax loss of £1.34bn for the 12 months till March 31.The telecom giant had cut 15,000 jobs last year.
Last year, the majority of the job cuts were in the area of indirect labour, including agency, contractors, subcontractors and offshore workers, including those based in India. The telecom giant has a global workforce of 150,000 and employs 90,000 directly in the UK.
The firm has steered clear of compulsory layoffs in Britain and hoped to cut the jobs through natural wastage and voluntary redundancies.
Source: Asian Age
Lower Salaries for Laid of Techies
Bangalore: Till a few months ago, IT professional T.V. George was earning Rs.70,000 per month, plus perks. But after losing his high-paying job, and being unemployed for three months, George, 31, has started giving tuitions in mathematics and physics to aspiring engineering students in his neighbourhood.
"Now, I am earning Rs.15,000 per month. It's been hard. I got married only a few months before losing my job. So, when I lost my job, I was in a difficult position. Thankfully, I had some savings. With the savings, I am paying my rent and for a few other necessities," George, who was employed with a top U.S. IT company, told IANS.
"After losing my job, I tried my best to get a new job. But I remained unlucky. So to help run my home, I decided to give coaching classes to aspiring engineering students."
George is not alone. Recession has hit the IT sector in Bangalore, with scores of techies losing their jobs. Some have been forced to take up low-paying jobs as they wait to bounce back when the recession ends.
Dipankar Dutta, 27, working with an Indian IT company as software engineer, lost his job almost eight months ago.
Today he has a job, but as a content writer in a tech firm.
"Thankfully, writing has been my forte. So, I landed this job of a content writer. Otherwise I would have been in a soup. Since I cannot afford to stay in Bangalore without a job, I compromised and settled for the new job with a much lower pay package," said Dutta.
Scores of IT and ITES professionals in Bangalore have lost their jobs in recent times, an effect of the global economic meltdown. But there is no precise count of the numbers.
According to the latest employment and business outlook report by Bangalore-based staffing firm Teamlease, at 23 percent the attrition rate in this city is higher than in any other city in India.
The report was based on interviews with HR heads, CEOs and senior executives of 495 companies in Bangalore, Chennai, Hyderabad, Kolkata and Pune.
"The city accounted for the highest attrition rate. IT accounts for over 80 percent of the city's total labour pool. The attrition rate was 23 percent in the last quarter, against the previous quarter's 16 percent. Much of the attrition could be involuntary attrition (or layoffs)," Teamlease General Manager Surabhi Mathur-Gandhi said.
India's Silicon Valley has seen thousands of people getting pink slips in recent months. And many more are under the threat of losing their jobs.
"It's painful to lose your job, in today's expensive world. Those who have lost their jobs are desperate now, thus they are settling for low paying jobs," Karthik Shekhar, General Secretary of UNITES-Professionals, an unrecognised union of IT/Call Centre/BPO employees, told IANS.
"Every day we meet young men and women who have lost their IT jobs recently. All they want is a job. But getting a job in the IT sector is very difficult. So, they have no option but to settle for jobs outside their fields and that too with low paying packages," Shekhar added.
It's encouraging that today's youths are ready to move ahead in their lives. Instead of waiting for the economy to revive, IT professionals have started exploring other fields and this is a positive sign," said B.N. Gangadhar, professor of psychiatry at the National Institute of Mental Health and Neuro Sciences (Nimhans), Bangalore.
Mohammed Khan, a trained software engineer, told IANS: "Initially it was difficult, but I am happy with my choice. After losing my job with an IT firm, now I am working as a sales executive. I am hoping the economy will recover soon and all the techies who have lost their jobs will get new jobs in their field."
Source: IANS
"Now, I am earning Rs.15,000 per month. It's been hard. I got married only a few months before losing my job. So, when I lost my job, I was in a difficult position. Thankfully, I had some savings. With the savings, I am paying my rent and for a few other necessities," George, who was employed with a top U.S. IT company, told IANS.
"After losing my job, I tried my best to get a new job. But I remained unlucky. So to help run my home, I decided to give coaching classes to aspiring engineering students."
George is not alone. Recession has hit the IT sector in Bangalore, with scores of techies losing their jobs. Some have been forced to take up low-paying jobs as they wait to bounce back when the recession ends.
Dipankar Dutta, 27, working with an Indian IT company as software engineer, lost his job almost eight months ago.
Today he has a job, but as a content writer in a tech firm.
"Thankfully, writing has been my forte. So, I landed this job of a content writer. Otherwise I would have been in a soup. Since I cannot afford to stay in Bangalore without a job, I compromised and settled for the new job with a much lower pay package," said Dutta.
Scores of IT and ITES professionals in Bangalore have lost their jobs in recent times, an effect of the global economic meltdown. But there is no precise count of the numbers.
According to the latest employment and business outlook report by Bangalore-based staffing firm Teamlease, at 23 percent the attrition rate in this city is higher than in any other city in India.
The report was based on interviews with HR heads, CEOs and senior executives of 495 companies in Bangalore, Chennai, Hyderabad, Kolkata and Pune.
"The city accounted for the highest attrition rate. IT accounts for over 80 percent of the city's total labour pool. The attrition rate was 23 percent in the last quarter, against the previous quarter's 16 percent. Much of the attrition could be involuntary attrition (or layoffs)," Teamlease General Manager Surabhi Mathur-Gandhi said.
India's Silicon Valley has seen thousands of people getting pink slips in recent months. And many more are under the threat of losing their jobs.
"It's painful to lose your job, in today's expensive world. Those who have lost their jobs are desperate now, thus they are settling for low paying jobs," Karthik Shekhar, General Secretary of UNITES-Professionals, an unrecognised union of IT/Call Centre/BPO employees, told IANS.
"Every day we meet young men and women who have lost their IT jobs recently. All they want is a job. But getting a job in the IT sector is very difficult. So, they have no option but to settle for jobs outside their fields and that too with low paying packages," Shekhar added.
It's encouraging that today's youths are ready to move ahead in their lives. Instead of waiting for the economy to revive, IT professionals have started exploring other fields and this is a positive sign," said B.N. Gangadhar, professor of psychiatry at the National Institute of Mental Health and Neuro Sciences (Nimhans), Bangalore.
Mohammed Khan, a trained software engineer, told IANS: "Initially it was difficult, but I am happy with my choice. After losing my job with an IT firm, now I am working as a sales executive. I am hoping the economy will recover soon and all the techies who have lost their jobs will get new jobs in their field."
Source: IANS
Sunday, April 5, 2009
HCL Technologies Salary Increments Frozen, Bonus Cut
http://www.business-standard.com/india/news/hcl-goes-for-salary-freeze-bonus-cutbacks/353832/
IT major HCL Technologies has decided to mitigate pressures on operating margins by freezing salary increments through 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. “HCL is discouraging travel requests, except in exceptional cases related to onsite employees. The option for an employee to use his travel allowance has been minimised,” said an HCL employee.
An HCL spokesperson said the recent communication with employees was part of a routine process under which the leadership of the company reached out to employees across the organisation to take stock of the current business environment, changing customer requirements and to together arrive at a comprehensive strategy.
“With increased focus on delivery excellence and operational efficiency, the strategy will enable the organisation to find opportunities in the current environment and carry forward the growth momentum,” said the spokesperson.
The company is also said to be looking at suspending matching contributions to employee retirement plans. Onsite allowances have also been slashed, though the exact quantum in this case is not clear.
Chief Executive Vineet Nayar is known to have met employees of the Chennai office recently, where these cost-cutting measures were spelt out. It is learnt that while the company has not gone for salary cuts at this point in time, a 25 per cent salary cut for employees on the bench has been considered. “Salary cuts were considered, but were not carried out. Instead, employees are now being charged for frills like coffee and refreshments,” said a source.
In January, HCL had said that it would reduce about 280 jobs, or 8 per cent of its global workforce, and implement other cost-cutting measures. The company is learnt to have laid off about 450 people from its British Telecom practice. Redeploying bench resources, which constitute roughly 20 per cent of HCL’s workforce, continues to be a challenging prospect for the company.
Many employees on the bench have been given up to two chances for redeployment on a new project, failing which they have been given the option to leave, sources say, adding that each fresher is being given up to two client interviews.
Besides shrinking IT spends in its key markets of North America and Europe, HCL’s acquisitions of Liberata Financial Services and Control Point Solutions ($20.8 million) last year are believed to have affected its EBITDA margins — which grew 1.1 per cent to 22.5 per cent on a year-on-year basis during the second quarter ending December 31 last year. To add to HCL’s woes, its forex losses owing to the depreciation of the rupee in Q3 of the 2009 fiscal expanded to $207 million from $156 million a year earlier.
Monday, March 16, 2009
HCL Tech lays off 450 staffers from it’s offices in India.
IT services company HCL Technologies has asked 450 employees at its Delhi and Bangalore offices to leave. A majority of those axed were on the bench.
An HCL Technologies official, who spoke to ET on the condition of anonymity, said that the company had sacked 400 people in Delhi and another 50 in Bangalore in the last one-two months. The firm had earlier asked those on the bench, the buffer of employees kept on the rolls for new projects, to get assigned to projects or face the prospect of being asked to leave the firm, he said.
In an email reply, a company spokeswoman didn’t comment on the number of people sacked by the company but indicated that the move was linked to the performance of employees. “HCL follows a systematic process of performance review and development, and the expectation of the organisation is for employees to meet the stringent performance standards. This is a routine and ongoing process,” she said.
As of December 31, 2008, HCL had about 52,957 employees. The global downturn has impacted the revenues of clients of Indian IT companies, thereby dampening demand for software services.
An HCL Technologies official, who spoke to ET on the condition of anonymity, said that the company had sacked 400 people in Delhi and another 50 in Bangalore in the last one-two months. The firm had earlier asked those on the bench, the buffer of employees kept on the rolls for new projects, to get assigned to projects or face the prospect of being asked to leave the firm, he said.
In an email reply, a company spokeswoman didn’t comment on the number of people sacked by the company but indicated that the move was linked to the performance of employees. “HCL follows a systematic process of performance review and development, and the expectation of the organisation is for employees to meet the stringent performance standards. This is a routine and ongoing process,” she said.
As of December 31, 2008, HCL had about 52,957 employees. The global downturn has impacted the revenues of clients of Indian IT companies, thereby dampening demand for software services.
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