Layoffs begin at Satyam, non-techies first to go

Though corporate affairs minister Salman Khursheed had hinted at government intervention, the first phase of layoffs has started at Satyam Computer Services (SATYAM.BO : 67.75 +4.9). Trainers, HR and sales and marketing executives are being singled out for action by Tech Mahindra (TECHM.NS : 657.8 +98.7), Satyam's new owner.
"The first phase of layoffs has started. In the second phase, employees who have been on the bench for less than three months would go away," said an official source. It couldn't be ascertained how many on the bench have been asked to leave. "Some senior executives on the bench are being offered almost 50% of their salary or an option to go on a sabbatical. Several benched senior executives have moved out," the source said.
On Monday, commenting on media reports that 10,000 employees could be retrenched at Satyam, Khursheed had stated, "Layoffs is something we are not going to turn a blind eye to, as we have a relevant presence in decision making (in Satyam Computer Services.)"
Though Tech Mahindra hasn't yet drawn a clear picture on how many of the 10,000 employees on the bench would be asked to leave and how many would go on the sabbatical, the initial targets are non-engineers in non-IT departments, says this source. Employees from human resource, training and sales and marketing departments are being asked to go on a sabbatical for at least three months. They have not been given a joining date, either.
Tech Mahindra is expected to take a final call on the matter by June 21. In a recent communication to employees, Hari T, global head-marketing, Satyam Computer Services, said, "By the 21 st of this month, 80-85% of your questions will be answered." He was referring to questions raised by employees on lay-offs, sabbaticals, reforms and HR restructuring.
Tech Mahindra is facing a huge challenge in managing the growing bench size. "The company is seeing more downsizing of its contracts and, in turn, an increase in employees on the bench," says the source.
The company is working on various initiatives to mitigate the impact of the large bench and utilise the staff. The employees are also being asked to take up multiple roles within their units and other departments like sales and marketing.
Meanwhile, the decision on the re-branding of Satyam is also awaited. "The company is yet to decide on the issue", CP Gurnani, president, international operations, Tech Mahindra, told employees.
An email query sent to Tech Mahindra was not answered till the time of filling this copy.