NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News  » Business » Satyam to close four leased facilities

Satyam to close four leased facilities

Last updated on: June 15, 2009 16:06 IST

Fraud-hit Satyam Computer Services Ltd is planning to cut real estate costs by terminating the lease contracts of four facilities in Hyderabad.

These facilities will accommodate 3,500 employees, who will be moved to the two company-owned campuses.

A Satyam spokesperson confirmed the development, saying: "We have sent notices to the property owners and we should be moving out of the four leased premises in Hyderabad this month."

Besides Hyderabad, the company will be closing three offices in Bangalore and two in Chennai this month, the spokesperson confirmed, adding that the cutbacks will result in a saving of about Rs 100 crore (Rs 1 billion) for Satyam this year.

A source privy to the development said founder Ramalinga Raju, who, on January 7, plunged the company into crisis by confessing to accounting fraud, had signed the lease rental papers for the Hyderabad properties in FY08 -- during the real estate boom.

The IT outsourcing firm, which was bought by Tech Mahindra last month, has two owned campuses and eight leased facilities in Hyderabad which accommodate around 15,000 employees.

The spokesperson said the cutback on office space was being made in anticipation of the "Virtual Pool" programme, which allows identified employees to take up to six months off on reduced pay, and efforts to consolidate.

Satyam has shortlisted over 7,500 associates -- including those who have not been in billable roles for three months and support resources -- for the programme.

Satyam had 41,622 employees as of March 28, 2009. The company lost over 2,340 employees over January and February.

K Rajani Kanth in Hyderabad