Satyam won’t sack, will pool 10k

To Create 'Virtual Pool' For Non-Billable Staff; Move To Help Co Save Rs 1 Cr A Day

 SATYAM Computer Services on Thursday unveiled a plan, which will see it sidestep the sensitive issue of sacking staff, but help save large sums of money in salaries, as its new owner Tech Mahindra attempts to put the fraud-hit company back on the rails.
Up to 10,000 employees, or about a fourth of the staff, will be allowed to join a "virtual pool" by taking time off from work on sharply reduced pay for up to six months starting next week.
The plan is expected to save the Hyderabad-based company, which now has some 41,600 staff, Rs 1 crore every day. Satyam spent around Rs 500 crore on salaries in February, and staff costs account for more than half of the company's expenses.
Employees, who have not been part of revenueearning assignments, at least, for the past three months, including support staff, will join the "virtual pool". Around 14,000 employees are counted among the company's non-billable resources.
"These employees will draw around 40-45% of their current salary, including medical insurance and provident fund benefits, for six months. We will have a review after that," Tech Mahindra CEO and Satyam director Vineet Nayyar toldET.
    Satyam has promised that the employment status of staff in its "virtual pool" will remain unchanged and they could be recalled to join with full pay based on business needs.
    "A virtual pool is a tried and tested practice, particularly among multinational companies. Many employees, who do not want to lose jobs in premium companies, are happy with such offers. This is a good move from Satyam's standpoint, combined to meet the challenges in a business cycle and mitigate human pain," observed Ajit Isaac, managing director of HR outsourcing firm Human Capital Solutions.
    A Satyam statement said the "virtual pool" is a onetime programme, suggesting that further drastic measures to trim staff costs may not be needed.
    Former Nasscom president Kiran Karnik, a government-appointed nominee on the board of Satyam, said containing costs is imperative if the company has to be saved from going under.
    "Most IT companies are looking at ways to cope with surplus staff and we reckon this is an innovative way of retaining the excellent human assets despite the difficult global economic situation. We need to ensure that the company becomes financially viable," he told ET. But some employees of Satyam were unimpressed, believing that the "virtual pool" is just another way of handing out pink slips of a very light shade. "It is a politically acceptable way of doing layoffs," an employee remarked on condition of anonymity.

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