Recession Layoff: Warning Signs

The ongoing recession has left almost everybody in jeopardy of losing their jobs. Following are some of the warning signs that should be kept in mind to recognize the possibility of a corporate bankruptcy or unemployment.

1.If the company starts hiring a consultant then one must be prepared that job cuts and lay offs are on the cards.

2.A bad assessment or review is also a warning bell. If your colleague is bestowed with a positive review then you might be on the hit list. You should definitely start worrying once your managers complains about the recession and layoffs.

3.If the company is experiencing low profits and the sales are also down, then it is the time to worry. Profits and pay cheque are directly proportional, hence a decrease in the profit will directly influence decrease in the pay. Thus, when a company is rendering losses, then it will surely start cutting the number of employees.

4.If your company is slashing the present salary of the employees then become sure that your organization is in deep trouble. The situation can also appear dim in case there is a pay freeze. This too means that the company is facing a precarious condition.

5.When people are being laid off and hiring has come down to minimal, then it is advisable for you to start looking for an alternative. You never know when you many be thunderstruck with the lighting of unemployment.

6.If your company on the verger of a merger then it implies that something big is happening for good or worse. Since merger puts any company in a very negotiable position, there is a chance that the employees will be sacked. This happens a lot in IT Jobs.

7.When too many rumors are being circulated in the market and the company officials are sitting with their lips sealed then there is a reason to worry.

These are some of the most common warning signs that implicate that your job is in danger. However, there are certain industries like auto industry and various manufacturing industries wherein the job stability is very less. Sometimes, even when your company is making profits but the industry is wavering, then your job might be far from being safe. Keep these warning signals is mind, especially during recession to keep yourself prepared for any catastrophe.

Human Touch : Layoff

Losing a job is akin to death for most & must be dealt with sensitively. Layoffs are the order of the day & a fact of corporate life. No organization worth its salt is going to tolerate poor competence & sloth and will get rid of employees who do not contribute, particularly in recessionary times. However, the process requires a great deal of empathy and tact.

More than anything it requires the 'Human Touch'. Here are a few tips:

1. Be transparent. The first thing you need to do is to be more open with your employees. Start by exposing your employees to all of your major business and financial metrics, because laying everything out on the table builds employee trust. Not only will exposing employees to this information give them some warning about downturns, but it might also spur them to come up with some approaches to solve your business problems.

2. Over-communicate. Not knowing what’s happening always breeds fear. The best approach to minimize fear and speculation is to over-communicate—saturating people with information. Keep rumour mongers at bay. They can destroy morale.

3. Focus your retention efforts. Generally, rather than low morale, the biggest negative business impact comes from increased turnover. The best retention approach begins by identifying and prioritizing the most critical segments of your employee population that are at risk of leaving (i.e., top performers and individuals in revenue-producing and mission-critical positions).

4. Educate them about the consequences. Educate your current employees so that they realize that losing a job isn’t the end of the world. Start by letting all employees know what help they will receive from the firm if they are laid off. In addition, if a significant percentage of your previously laid-off employees have successfully found jobs, make your employees aware of it.

5. Take the responsibility of informing the concerned person that it was a decision made by & why it was made. Offer to help the person find another job if he/she allows. Also insist that the person’s department head and HR are around. The occasion is a serious one and is not to be dealt with flippantly.

It’s important to realize that having no layoffs can actually backfire, because it can cause employees to develop the expectation of permanent job security getting them to rest their oars and drift. This isn’t a good result, because a reasonable fear of business downturns actually tends to keep your employees from becoming complacent.

Why Delay AOL Layoff

Everyone knows Tim Armstrong is planning more layoffs at AOL once the company is spun off from Time Warner. So why let them hang over the company's return to the markets as an independently-traded stock?
Armstrong, the former Google advertising chief (pictured), jettisoned some top lieutenants from AOL, the internet conglomerate, last month. Beyond that, he's believed to be planning major job cuts as part of a sweeping reorganization of the company. "AOL is not going to change itself by incremental movements," Armstrong recently told PaidContent. Asked if this meant "large cuts," he talked about going "deep into the employee organization... to come up with ways to structure the company... I would expect announcements about that by early next year."
Early next year would mean just after the spinoff from Time Warner, assuming it goes forward as expected late this year. An AOLer who attended a recent internal "Town Hall" meeting on the restructuring, dubbed Project Everest, confirmed the layoffs are planned for post-spinoff.
One explanation we've heard for that timing is that Time Warner CEO Jeff Bewkes didn't want layoffs taking place while AOL was part of his company. That makes some sense — layoffs typically carry a price tag, and Time Warner presumably doesn't want to take the hit for a move that will benefit another company over the long term. Time Warner isn't taking on debt as part of the transaction, our AOL tipster said, which jibes with the media conglomerate's statements that it is AOL that might load up on debt as part of the spinoff.
But a delayed deep restructuring means uncertainty for investors considering what to do with AOL shares in the earliest days of tradubg, which in turn means a potentially depressed price. A weak re-debut for AOL shares would not bode well for a company that has already had more than its share of struggles. Then again, if anyone can sell uncertainty, it's a consummate salesman like Armstrong.

QA with Laid off Employee

A friend of mine got laid off just as a new report found 467,000 people got pink slips last month. That puts our national unemployment rate at 9.5 percent, a 26-year high. I talked to my friend Leah, an engineer in Los Angeles, about filing for unemployment, coping with unexpected emotions, and visiting Yosemite. Disclosure: I changed her name to protect her privacy.

What was your initial reaction when your boss told you you were getting laid off?

I sat there for a full minute, quiet, with all these things going through my head…I felt shocked and angry and betrayed and then just confused. I think I finally said “I don’t understand.”

What didn’t you understand?

I didn’t understand why because to everyone’s knowledge in the office we were safe. We had plenty of work. But I found out (in my bosses office) that a big project or two had just recently gone on hold indefinitely. Which totally messed up everything. So they had to make some changes.

Have you ever been laid off before?

No.

How are you coping, two weeks after?

Now I feel fine, comfortable. The first three days were tough. I felt sad but I felt relieved.

Why were you relieved?

In a way I had been somewhat frustrated with the way things were going at the office, personnel-wise, project-wise, and I had had some thoughts about doing something different. But no specific thoughts. I wasn’t searching for anything. The relief was now I can think about these other things in more detail.

Did you see it coming?

I remember about two or three weeks before I got laid off that 25 people in a company in San Francisco that was one of our clients got laid off. I remember being surprised, thinking “Wow I really can’t take this all for granted anymore. I don’t think it really sank in because one of those emotions that went through my head, that still does, is that I felt really foolish thinking that my history with the company and the fact that my project was strong was keeping me safe. My project still is going. It has a source of funding. I felt foolish for linking those things. I took it for granted even after telling myself that I shouldn’t.

How prepared financially were you for something like this?
I have some savings that could probably get me through a couple months so I’m not panicking yet.

Financially, have you done anything different since getting laid off?
I’ve been eating out less, drinking less, making choices that I don’t have to spend as much money. Looking back on my expenses, at least 50 percent were eating out.

Are you cutting out a few things entirely or making reductions across the board?

I will probably cut down across the board and not on anyone thing. I’ll put off big purchases that I otherwise would have gone ahead and done. For example I want a new pair of running shoes. But that’s like $100 give or take so when I got laid off, I said I can live without a new pair of running shoes.

Has your attitude about the recession changed since getting laid off?

I’m definitely more interested in unemployment benefits news and economic stimulus package news because now it actually does affect me or could affect me. I never really paid attention to that before, not for lack of interest but for lack of time.

What are you most concerned about?
To be honest I haven’t started to think very far in the future yet because I am really relived to just be able to live in the moment and relax. It’s summer and I know that I have a little bit of a cushion to take a month to just breathe.

What are you least concerned about?
I’m actually not real concerned about not ever being able to get another job because I feel the market will improve, it may just be a matter of time. I have certain knowledge and strengths and excellent referrals. My bosses have said they would be more than happy to help me out with any references. We left on very good friendly terms.

Do you still have health care?
Yes I got a severance package through the end of July and then I have to figure out COBRA.

What is your plan for the next 6 months?

I haven’t thought more than a month and a half out. I’ve got two weeks until a triathlon race and then I’m going to take about 2 weeks to travel through California, visit friends, go through Yosemite, go through Mammoth. I’ll fly back to New York, go see my parents.

Anything else you want to add?
I did file for unemployment. Haven’t heard anything back. It was easy to file online but I haven’t heard anything. It takes a while.

siemens to Layoff

German industrial conglomerate Siemens AG is planning job cuts "in some business areas or at some locations," its CEO was quoted as telling weekly Welt an Sonntag today.

Siemens CEO Peter Loescher said that because of the financial crisis, "some parts of our business areas have had a decline of orders by up to 70 per cent."

"In this case, one can't just stand on the sidelines and watch," Loescher said, adding that the Munich-based company had to take the necessary steps to react to the crisis.

He did not elaborate where or when the company would lay off employees or how many people would be affected.

"It will take a long time until there will be an expansion of our capacities again, like the one during the boom years of 2007 and 2008," Loescher was quoted as telling the paper.

Wipro lays off 300 non performers

To power its growth during the present slowdown, Wipro, the third largest IT services company in India, has resorted to certain stringent measures. Last week, according to company sources, an indefinite number of employees have been laid off by the company. An employee, who has been laid off says, "Last week, around 300 employees were laid off on one single day."

Some had to wait for a long time to get back their documents, after being told about the company's decision. The employee illustrates, "I had to wait for more than eight hours to get back my documents, because of the long queue of employees."

Few days back, Wipro had outperformed its larger rivals Infosys and TCS both in terms of profit and revenue growth, in its Q4 results.

The move by the Bangalore-based company comes in the wake of an announcement made by Girish Paranjpe, Joint CEO of Wipro's IT business. Paranjpe had said, "For FY09, we probably have seen five to seven percent of our manpower employed with the IT business being released, as against two to three percent a year back."

According to Paranjpe, the performance criteria have become tougher now, because of the slowing economy. Last year, the company had announced, to put four to five percent of its workforce that is about 3,000 employees, under the performance scanner. Based on their performance some would be given counseling to help them improvise, while others would be asked to quit.

The spokesperson said, "Those who don't clear the �tests�, are the ones who are sent off." Pointing out to similar kinds of measures by other companies, she added, "This type of a move is taken by many companies these days, due to the economic downturn."
Courtesy: siliconindia

Adobe freezes pay, cuts variable

Adobe Inc, the world’s biggest maker of graphic-design software, will freeze pay this year as the recession crimps sales, said Chief Financial Officer Mark Garrett. “Clearly, we aren’t going to have salary increases,” he said in an interview. “The bonus plans and variable compensation plans will pay out less. We have set ourselves up for what we think we need to do -- from a costs perspective -- for the rest of this year.”

Adobe also has cut about 8 per cent of its workforce, curbed travel and reduced its use of contractors. While US demand is now steady, overseas sales may still be dropping, Garrett said. That revenue accounted for almost 60 per cent of Adobe’s total last year.

TCS Drops plans to raise headcount in australia

Global IT major Tata Consultancy Services (TCS) is understood to have shelved plans to increase its headcount in Australia to around 2,000 by the end of this year. The reason: The ongoing financial crisis.

TCS had dropped plans to boost its headcount in Australia even though it recorded double-digit revenue growth, according to reports and blog posts from the country.

The Tata group company employed around 950 people in Australia at the end of the previous year, but around 50 have since been relocated to India. This puts TCS’ total employee base in that country at around 900, reports say.

A TCS spokesperson said: “Australia continues to be a significant growth market for TCS. Given the uncertainty in the global economy, TCS will grow its staff strength in line with the business growth there. Under the current context, with customers looking at offshoring as an effective value proposition, we are likely to see an increase in people servicing Australian customers in India.”

In January, TCS Asia-Pacific Head and Regional Director, Girija Pande, had said that the company planned to double the number of workers in Australia by the end of the year.

In Australia, TCS provides near-shore, high-profile technology services.

No pay hike at wipro

Wipro has announced that it will not be giving its employees any wage hikes this fiscal year. The company also said that it would honor its commitments to fresh graduates it hired last year but on a staggered basis. The students will have to wait longer before being absorbed in the company.

Wipro had issued offer letters to over 7000 students from various universities who have graduated this year.

Pratik Kumar, vice president (human resource) at Wipro said, "We will honor our commitments made to the students last year but it will be on a staggered basics since we don't want them to sit in the bench. We will also have no wage hike during this fiscal."

Since we are not sure how many we can absorb this fiscal, some of the freshers could spill over next fiscal, he said.

Wipro will be going for fresh recruitments only during Jan-Feb of 2010. Kumar also said Wipro would go for lateral hiring depending on business generation.

The company has also made it a policy to approach students only during their last semester unlike earlier when it approached them during the 6th semester.

No Hikes at Infosys

Top IT companies such as TCS, Wipro and Cognizant have kicked off promotions and salary hikes for some employees but the country’s second largest software exporter Infosys prefers to wait and watch till the environment becomes more stable, according to the company’s CEO and MD Kris Gopalakrishnan.

Talking on the sidelines of ICT event Connect 09, Gopalakrishnan also shared his views on the 3-year extension of tax benefits on STPI units proposed by Union Minister A Raja and also a possible solution to counter the recent changes in UK’s immigration norms. Excerpts from the interview:

Some companies in the top five have announced promotions and hikes. When can Infosys employees expect something similar?

The thing is the industry is still facing uncertain times. We would like to look at the situation. As it develops, as it evolves, we are constantly looking at it and then when we decide we will let you know.

Union Minister for IT and telecom A Raja said that he plans to extend the tax benefits on STPI units by another three years from 2011 to 2014. What are your views on the same?

If it is done properly, it is going to help the industry. So, what is needed is extension of the 10-year holiday to 13 or 15 years. Then it will help, because most of the STPs have come out of the 10-year holiday. The 3 year extension will also help but in a smaller way.

As the law stands today, the tax break is available for new units. When you create a SEZ it’s a new unit, when you create a STP, it’s a new unit. So the benefits are available only for new units as it stands today. You need to extend the benefit to existing units by extending the term to 13 years or 15 years.

Recently, there’s also been a lot of noise about stricter immigration norms in UK, where lobbyists are trying to work out rules that will benefit local workers. How will this impact Infosys, for which UK & Continental Europe is the second-biggest revenue generator after US?

Till now, the impact has been minimum. But definitely there is a change in attitude because unemployment is going up in these countries. So, they are looking at how they can tighten their immigration rules. This is also targeted towards illegal immigrants. And what is needed is to make sure that you work with these governments to reduce the impact. India is becoming a very attractive location for overseas people, for foreigners to work in. So we can have a counter agreement with these countries.

And we need to canvass for a different kind of visa, which is a work permit visa. Today immigrant visa is used for work permit. So, it’s confusing the issue, because most employees going there are not going to immigrate. They are just going to work and come back.

Nasscom, CII are working with the govt of India, with these governments to make sure that our perspective, our voices are heard and a proper solution is found. This is also part of the WTO discussions.

US Technology Industry loses 1,15,000 jobs in first half of 2009

Seems Indian techies have been luckier than their counterparts in the US. According to a study by TechAmerica Foundation, US technology industry cut 115,000 jobs in the first half of 2009, compared to the 72,900 tech jobs added in the same period in 2008.

However, in the US too, the tech sector seems better than other industry verticals. While between June 2008 to June 2009, tech lost 224,100 jobs, a 3.7% decline; the US private sector shed jobs at a higher pace of 5.1%.

The Washington-based non-profit foundation also said that high-tech manufacturing in the US continues to shed jobs, having lost 69,500 from January to June 2009. The high-tech services sectors shed 45,500 jobs from January to June 2009, a 1% drop.

The report also said that for the first time in its 5-year history, all three services sectors saw losses: engineering and tech services lost 21,500 jobs, while communications services shed 13,600 jobs. In software services the job cuts stood at 10,400.

Cheer Up!! Hiring and Salary Hikes are Back

Bangalore: Many were predicting six months back that the Indian IT industry would be entering its twilight zone, but now there are indications that these predictions may go wrong. Several IT companies have restarted hiring and are giving salary hikes to their employees.



"That phase of drastic downturn is behind us," says S Ramadorai, CEO of Tata Consultancy Services (TCS). "There's stability now. The deal pipeline is encouraging, but the time it takes to close a deal remains long. And many customers are yet to fully open up their IT budgets," Ramadorai added.

While IT majors like TCS, Wipro and Cognizant have started promotions and salary hikes, Kris Gopalakrishnan, CEO and Managing Director of Infosys feels that things are looking better now, however the company prefers to wait and watch before giving any promotions or hikes, reports The Economic Times.

The recovery of the defamed Satyam Computer Services under the new owner Mahindra Satyam has also proved to be a boon for nearly 28,000 employees across all levels, with the restoration of the variable pay. The variable component is 10 percent at the entry level, 20 percent at the middle level and 30 percent at the senior management level. IT bellwether Wipro has lifted its freeze on hikes and promotions, at least for some employees.

Manpower supply company TeamLease, which saw its open positions drop significantly from 10,000 a month to 800 post-recession, has in the past couple of months seen those numbers rise to 3,500.

With the current trend companies have also started showing more confidence in the Indian market. Information infrastructure company, EMC has announced that it will invest $1.5 billion in India over the next five years, a level of investment from a single company that the sector has not seen in close to two years. Partha Iyengar, Regional Research Director in Gartner India, says the number of calls the company gets from customers for directions and consulting has gone up sharply in the last 3-4 months.

The Indian IT industry was one of the worst hit by the recession on account of its dependence on international markets - especially the U.S. and European markets. The freeze on IT budgets by companies around the world meant that new orders dried up. Industry association Nasscom initially forecast that IT exports would grow by 22-24 percent in 2008-09, but as the recession deepened, this was revised down to 16 percent. For this fiscal, the association has projected a 4-7 percent growth to $48-50 billion.

Accenture Layoff

Accenture said Thursday that it will thin its ranks of senior executives.

The company, which announced the layoffs in a statement, said it will cut its senior executive ranks by 7 percent. Accenture will take a charge of $128 million to cover severance and other layoff costs.

In another cost cutting move, Accenture said that it is cutting its office space to save on real estate. That move will result in a charge of $119 million.

Accenture CEO William Green said the senior executive layoffs will ensure the company “has the right people, skills and capabilities, at the right levels and in the right places.”

The cost cuts are expected to be complete in the fiscal first quarter. Accenture also stuck with its fourth quarter revenue target of $5 billion to $5.2 billion.

TCS to hire 25000

Bangalore: In a move that could bring a smile to many faces, Tata Consultancy Services (TCS) has announced that it will hire 25,000 people globally in 2009, with 90 percent of them in India alone. Though the number is bigger when compared to the hiring these days, it is less than last year when TCS appointed around 35,000 people.

With this recruitment drive, TCS also plans to expand its presence into the tier-II cities in India. "We will be hiring 25,000 people this year, which means roughly 25 lakh square feet of work space required and, therefore, we need to grow outside the metros. Tier-II cities are our only focus for expansion in the country as the top rung are clogged and saturated," said Tanmoy Chakrabarty, Vice-President and Head of Government Industry Solutions unit at TCS.

Following this hiring spree, the total global manpower of TCS would go up to more than 1.8 lakh. This will put the IT services provider among large private Indian employers like Tata Steel, which has the total employee strength of two lakh. Going forward, the company, which has an estimated 32 percent market share, plans to cash in on the Indian government's plan to invest Rs. 40,000 crore on IT services.

Currently, 70 percent of the IT segment's revenue is from India, while the rest comes from the U.S., Latin America, Africa and South East Asian countries. However, the revenue contribution from Indian government businesses to the total company revenue of $6 billion is less than five percent, which the company intends to increase to more than 10 percent in the next three years.

Tough for Indian IT Pros in UK

Bangalore: The UK government has accepted recommendations for stricter immigration norms and restricting job opportunities for skilled migrant workers from countries like India, reports Economic Times.

The Migration Advisory Committee (MAC) report submitted by the committee's Chairman, Professor David Metcalf to UK's Home Office last month recommended that the threshold salary levels for allowing entry of a graduate skilled worker be raised from the current 17,000 pounds. This will make it tougher to earn points needed for allocation of work permits.


With more stringent norms, companies like TCS, Infosys, Wipro and Tech Mahindra which serve British customers such as BT, British Petroleum and British Airways by sending Indian professionals to the country on short term project assignments, may now have to look for local UK workers.

"These changes will ensure that businesses can recruit the skilled workers that the economy needs, but not at the expense of British workers, nor as a cheaper alternative to investing in the skills of the existing workforce," Home Secretary Alan Johnson said in a statement issued by the UK Border Agency. He also added that the threshold of income at which migrant workers become eligible for work permits will now be raised to 20,000 pounds.

As per rules, companies will need to advertise for available positions for four weeks before employing migrant workers. "This will mean that, from next year, all jobs must be advertised to British workers in Jobcentre Plus for four weeks - extended from two weeks - before companies can seek to employ individuals from outside Europe. This will ensure that British workers not only are first in line for jobs but also have more time in which to apply," the Home Office said.

MAC's recommendations for tougher intra-company transfer rules - a route adopted by many tech firms for sending Indian workers to work with customers onsite in the country, have also been accepted.

Morgan Stanley Looking at Exiting back office ops in India

Bangalore: U.S. bank Morgan Stanley is exploring the opportunities to exit its back-office operations in India. The bank, which was bailed out by the U.S. government, is looking at its options to sell the back-office unit that does IT development as well as finance and accounting-related work, reports the Economic Times.

Knowledge Process Outsourcing (KPO), equity research, complex financial modeling and portfolio analysis are among the work done here.

According to an investment banker, the potential value of the transaction could be $150-$200 million, in which the KPO operations have a share of $50 million. These operations employ around 2,000 people, of which 500 are KPO employees. Most of the operations are based out of Mumbai and a small part out of Pune.

The value of the deal will also depend on the amount of business the bank will sell. "The annual revenue run rate for Morgan Stanley's captive operations is $70-$80 million. So, the committed business could be around $500 million for five years," said a person with knowledge of the development.

Large Indian IT firms are the expected buyers, some of which already do development work for the bank. These include Infosys, Wipro and KPO firm like eClerx, which works for investment banks, travel and retail industry.

The need to convert fixed costs to variable costs by moving work done at the captive unit to third party vendors is among the factors which drive the sale of many captive units. When the work is outsourced to third party vendors, there is greater flexibility to increase or decrease work without having to hire a fixed number of employees.

Indian IT Companies Skip Campuses

Bangalore: With Nasscom, the software industry's apex body advising its members not to go to campuses for recruitment, the placements at engineering colleges has dried up. However, although 2008-09 was a difficult year for training and placement officers (TPO) at engineering colleges, 2009-10 could be the most critical year for campus placements, reports Economic Times.


JN Pitambare, Dean of Sinhagad Institute says, "Normally, 75-80 percent of the placements used to take place by mid-August. However, this year I will be happy if I am able to place even 10-15 percent of our students by December."

SV Dravid, TPO, DY Patil College of Engineering at Akurdi, near Pune said, "Last year, we had placed 150 students by this time. This year, not a single student has been placed. I hope the situation improves by December." Normally the big software companies finish recruitment by mid-August, placing around 75 percent of the college students.The core sector companies used to come from August, but this year they are non-committal.

Companies have been telling TPOs that their placement requirements are yet to be firmed up since things are not planned yet or they do not know how many projects they will get. "Most of the core companies are in a dilemma. They have promised to come for placements by December," said TPO Federation President Professor Shital Rawandale. Not only are there fewer jobs on offer for 2009-10 but the companies are adopting various techniques to defer the joining dates of candidates recruited last year or even to reject them.

Top colleges like the College of Engineering Pune (COEP) are also facing problems. "Of the 576 students placed last year, only 150 have joined till now. For the rest of them, joining has been deferred from July to December," said Assistant TPO, COEP, SA Meshram.

Some of the selected candidates are being asked to take more tests. With the recession, singing of bonds has also returned. "Some small and medium-sized software companies now want the candidates whom they had already selected to enter into two-year bonds," said a TPO.

Accenture to Lay off 336 senior level managers

Bangalore: Accenture, a business consulting and outsourcing company is likely to lay off around 336 senior-level managers as part of a broad-based restructuring effort. William Green, CEO, Accenture said, "We are taking this step to position Accenture better for both short-term and long-term economic improvement growth and profitability."

The company has about 177,000 employees globally, of which 4,800 are senior-executive employees. The lay off is likely to be completed by the end of November 2009. The company said that the reductions would cost about $247 million in the fourth quarter, which ends on August 31. Out of $247 million, about $128 million of the charge is for severance and related costs of workforce reductions at the senior executive level and $119 million linked to reduction of excess office space. The company said that the space reductions would be completed by the end of August, while the job cuts are expected to be completed in the first quarter of fiscal 2010.

According to a projection by Goldman Sachs Group, global technology spending will decline by eight percent this year. Accenture said that it continued to expect net revenues for the fourth quarter in the range of $5 billion to $5.2 billion with operating margins between 13.4 percent and 13.7 percent. But the company also added that the restructuring charges will likely reduce its earnings per share for both the fourth quarter and the full year by 24 cents.

The company had generated net revenue of $23.39 billion for the fiscal ended August 31, 2008. In the last one year, the stock of Accenture has climbed by 11 percent on the New York Stock Exchange (NYSE).

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

Indian IT the Trends on Emplyment

The Quarterly Results of Top Indian Companies are out, some of them have done well in terms of profit growth however what needs to be seen is that the employment numbers (Net Additions) for almost everyone is negligible or Negative.

The Big Indian IT Companies were growing at 30% plus in revenue terms and hiring 10,000-20,000 Freshers each, the attrition rate was also high as emplyees left for better opportunities elsewhere.

Now the situation has completely reversed, the number of emplyees has actually come down for most of the biggies rather than going up, this despite of the fact that fresher and lateral hiring in niche areas is still continuing, this infact lays bare the claim of these companies that they are not laying off.

For the IT worker this is a time for self realization, it is true that 20-30% of the workforce would be performing below performance standards and the weeds need to be rooted out, however the employees need to introspect and see themselves in the mirror, that instead of wasting the bench time on gossips and playing games if they had done technology upgradation of their skills they would still be having a job. The Emplyees are as much to blame for a layoff as no sensible company would throw out good people, and even if they are thrown out there are enough opportunities in the market to go to.