New Delhi: In its efforts to get out of the financial mess created by the multi-crore rupee fraud, Satyam Computer is planning to reduce real estate costs by terminating lease contracts for offices in India, which will help the embattled IT firm to save up to Rs100 crore by the end of this year.
“Satyam has plans for reducing space-related costs in India by more than 20%. This is expected to be done by consolidating operations into a smaller number of buildings and looking at synergy between Satyam, its BPO arm, and Tech Mahindra,” a source close to the development said.
The company has already identified savings of Rs100 crore from this initiative, the person added.
The company, which was recently acquired by Tech Mahindra, has a large number of leased offices in India.
According to sources, Satyam plans to surrender offices whose terms of lease have expired or would be over in a few months.
By consolidating its office operations and delivery infrastructure, Satyam will be able to reduce overhead costs as well, the person said. “Consolidating space would also allow the company to optimise related costs in building maintenance, security, transport, and other support services,” the person added.
Satyam plunged into a crisis after its founder B Ramalinga Raju confessed to perpetrating one of the biggest frauds in India’s corporate history.
Tech Mahindra had outbid others in the race to acquire a controlling stake in Satyam Computer.
Besides real estate cost, the company is reducing costs on networks and systems. It also plans to re-lease some of its networks and hardware.