Satyam not to lay off employees

All the 10,000 surplus employees of Satyam Computer, who feared unemployment, can breathe easy now as the company's new owner Tech Mahindra on Thursday said there will be 'no retrenchment.'

The surplus employees would be put in a separate pool and would be paid basic salary, provident fund and medical insurance, and at a later stage if they still needed a job they would be considered for employment, Tech Mahindra chief executive officer Vineet Nayyar said after the board meeting.

Text: PTI

"Surplus employees is a cause of concern and the whole IT industry is facing the same problem. We have spent lots of money on training our employees and they are an asset. We are not going to retrench them but we will create a virtual pool and they will be put into that," he said.

The government had recently said that it would not turn a blind eye to layoffs in Satyam but the Corporate Affairs Minister Salman Khursheed had clarified that the decision rested with the company board, which, according to him, was responsible and sensitive.

 

The speculation about a massive layoff had started after Nayyar last month pointed to the surplus staff of 10,000 and expressed concerns over extra flab in the company, which recorded a meagre profit in January this year but improved the bottom line to Rs 51 crore (Rs 510 million) in February.  

Tech Mahindra, the IT arm of multi billion dollars conglomerate Mahindra and Mahindra, acquired strategic 31 per cent stake in Satyam for which the government-appointed board had invited bids for salvaging the IT giant reeling under an estimated Rs 10,000 crore (Rs 100 billion) financial fraud.

 

Nayyar said that during the period in virtual pool the employees can do social work and can look for a job and they can be called back when required as regular employees, he added.

Asked whether company has identified surplus employees, he said, "Yes. We have identified about 10,000 non-billable employees (those who are on the bench for the last six months)."