How India's IT giants are cutting costs

[bobby]

Indian IT companies are becoming more innovative in terms of cutting costs and, interestingly, they are now seeking ideas from their employees!

While multi-national companies are on a job-cutting spree, the mantra for Indian companies is 'cut costs'. From cutting down on snacks, travel, telephone bills, power, stationery bills and even tissue rolls in rest rooms, the going gets tougher for IT professionals.

Infosys has asked every employee to save $10 dollar each. This would result into a total savings of about $1 million for the company, says S 'Kris' Gopalakrishnan, chief executive officer, Infosys.

The company has set up a portal for employees to send ideas on how to cut costs. The move seems to have worked with the company getting over 1,000 ideas in this direction.

Infosys has also offered a sabbatical to employees who have completed two years in service. Employees will get 50 per cent of their salary during the sabbatical. They also have an option of working with NGOs.

"We will have to look at controlling our costs and expenses, making sure that we run an optimised business. We will have to look at what are the things we need to do in order to prepare ourselves for the recovery," Gopalakrishnan said.

Infosys will freeze recruitment after meeting this fiscal year's target of hiring 25,000 employees, he said. Infosys hired 16,000-17,000 employees in the first half of the fiscal year.

Infosys has over 100,000 employees.

No sabbatical or social work for employees, says TCS. But the company is serious about cutting down on travel, power, communications, and raising employee productivity.

"We are reviewing all our capital expenditure plans. This includes technology acquisition, infrastructure development, and even travel and power expenses," S Ramadorai, chief executive officer, TCS said.

TCS is planning lower salaries and stricter appraisal norms next year. Many IT firms are calling employees back to India instead of sending them abroad on different projects. This works out to be cheaper for the companies.

TCS has total staff strength of 120,000.

Cost-cutting measures at Wipro took an ugly turn with students from engineering colleges protesting against Wipro's move to employ engineers at the business process outsourcing (BPO) unit at half the salary they had been offered initially.

However, Wipro has now agreed not to change the salary package for those who are asked to join Wipro BPO.

Wipro employs over 95,000 employees.

Satyam Computer Services is following in Infosys's footsteps. It plans a sabbatical for its employees.

Satyam staff may also be given the option of taking up corporate social responsibility activities, at a lower salary. The company may also look at cutting down perks. The company will take a final call on cost-cutting measures after the third quarter results.

Satyam currently employs 52,865 people.

Many IT companies are restricting offshore projects as it works out to be more expensive.

While Indian IT companies are trying their best not to lay off staff, most firms will freeze recruitment next year. Pay hikes will also be resticted.

There has also been a fall in campus recruitments this year.

The coming year will only worsen the scenario with companies already reporting a fall in orders from clients in the United States.

These are indeeed tough times for the nation's software insustry.

[BuklerMan]

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