Beleaguered Indian company Satyam Computer Services Ltd. (SAY) Thursday launched a one-time program to manage and address costs related to surplus staff, targeting to retain skilled resources, and also to keep the company competitive. The program is effective June 2009 and applies only to India-based staff. The company anticipates about 7,000 to 10,000 employees to be a part of the program named the 'Virtual Pool'.
In a statement, chairman of the board, Kiran Karnik said, "The recessionary climate that has seriously affected the IT industry, in addition to the unprecedented set of events that Satyam faced recently, has added to its pressures. The Virtual Pool Program is a unique way of retaining associates and developing them further through training, while ensuring the financial viability of the company."
Earlier, reports suggested that Satyam is likely to downsize its manpower strength by shaking hands with most of its non-billable staff of up to 8,000 working in marketing, human resource and administration wings, after Tech Mahindra takes over on June 1, 2009. Reports hinted that the IT firm had an excess staff of up to 12,000, and were looking at the least painful way to tackle the problem.
Last week, India's Corporate Affairs Minister Salman Khurseed said the government would not turn a blind eye to any lay-offs at Satyam. However, Karnik ruled out any government intervention to protect employees.
The Hyderabad-based company noted that the Virtual Pool program is designed to cover employees who have been in non-billable roles for three months or more, including support staff. The program is an innovative way of retaining the excellent human assets of Satyam despite the difficult global economic situation, the company added.
The program would allow employees to retain their employment with the company, while they take time-off from work on a basic pay or reduced pay structure for up to six months. The employees associated with the program would also receive provident fund and medical insurance for the period. Additionally, the employees in the virtual pool can regularly upgrade their skills utilizing Satyam's learning programs and mentoring resources.
Based on business requirements, the employees in the virtual pool may be recalled and reinstated with full pay, along with all benefits, with their employment status continuing undisturbed.
In April, Tech Mahindra Ltd acquired an initial 31% stake in Satyam Computers after it was declared as the highest bidder at Rs.58 per share. Tech Mahindra would acquire another 20% stake in Satyam Computers in an open offer.
Ramalingam Raju, founder and chairman, of Satyam Computers revealed in January that the company's profits had been overstated for years, putting in doubt the survival of a company once ranked as India's fourth-largest software services exporter.
In Thursday's regular trading session, SAY is currently trading on the NYSE at $4.47, down $0.47 or 9.51% on a volume of 22.19 million shares. In the past 52-week period, the stock has been trading in a broad range of $0.78 to $27.53.
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