Indian offshoring company laying off 1,000s

September 16, 2008

Satyam is laying off 3,000 employees in India according to this post. Wonder if this is an omen of bad tidings in the IT offshoring industry. Another 1,500 employees face the boot:

This translates to a little less than 9% of the 51,000 employees that the company employs. Company sources say 1,500 employees have been put under the performance improvement plan (PIP), euphemism for employees put on watch list and asked to shape up or ship out. Apart from this, 3,000 others have not been given any increment in the last appraisal cycle, thereby indicating that their services are dispensable.

PIP – performance improvement plans. I think America invented these, General Electric especially noteworthy for tossing out people who didn’t cut the mustard on their plan ratings.

However, even if you are one of the unlucky ones to be PIP’d, you have to look presentable at the office:

On Friday, all employees received an e-mail from the company chief Ramalinga Raju warning them, especially the ones on the bench, to not bunk office and be in their best dress code, failing which they may face strict disciplinary action.

Interesting items from the article. Employees under poor performance watch are given dummy projects to prove themselves on??

A Satyam spokesperson said: “The bottom 5% of those who have got a bad appraisal are put under PIP and given dummy projects to prove themselves. If they fail they will be shown the door. But some of them marked for PIP said they have been given very little time to come up as winners.” However, even as it downsizes, Satyam continues to hire new employees in thousands. Over 40% of them are fresh blood just passing out of college.

Is this a revolving door of people, those going out who cost too much and don’t have freshly minted skills from school, and new hires going in. 

The spectre of retrenchment is creating panic among employees of the company. “Of the 12 people working in my project, five were suddenly asked to resign, failing which, the company warned, it would fire us. Everything came without warning,” said a techie pleading anonymity.

They are asked to resign, but would be fired if they refused to resign. There is a difference in India? What do you get if you resign. Here if you resign or are fired, you are supposed to be denied unemployment benefits. Is it a face saving thing?

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