Satyam to rationalize staff costs ahead of board meet

Satyam to rationalize staff costs ahead of board meet
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First Published: Thu, Jun 04 2009. 10 53 PM IST
Updated: Thu, Jun 04 2009. 10 53 PM IST
New Delhi: Fraud-hit Satyam Computer Services Ltd, recently acquired by Tech Mahindra Ltd, is expected to put between 5,000 and 10,000 employees on a so-called virtual bench in a bid to reduce costs.
Under this arrangement, the employees are likely to continue getting provident fund payments, healthcare reimbursements and a portion of basic salaries.
People familiar with the development said Satyam is bleeding as much as Rs2 crore a day due to staff costs. Vineet Nayyar, chief executive officer of Tech Mahindra, had last week said the Hyderabad firm had excess staff of around 10,000 on its rolls.
As of now, the consensus is to not opt for large-scale layoffs, the people said, on condition of anonymity. The government nominees on the board of directors are also not in favour of permitting sabbaticals without salary, they added.
Satyam is also looking at rationalizing the use of office space, aiming to save between Rs50 crore and Rs100 crore every year.
The cost-cutting measures are expected to be discussed by its board at a review meeting scheduled for 11 June. The board is likely to review operations, finances and a transition on the board, the people said.
According to latest available data for the quarter ended 30 September 2008, Satyam had a stand-alone employee strength of 48,434 and a consolidated head count of 52,865, including those deployed at subsidiaries and joint ventures.
cnbctv18@livemint.com
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First Published: Thu, Jun 04 2009. 10 53 PM IST