Oracle India trims salaries with hour-based payments
Bibhu Ranjan Mishra / Bangalore Jan 06, 2009, 00:31 IST
The world’s second-largest software products company Oracle is understood to have begun linking the payment of its 20,000-odd employees in India with the productive hours they spend in the company. This has resulted in salary cuts, ranging between 10 and 50 per cent across the board.
Company sources explain that if an employee is a billable resource for 15 days a month, he will be paid in full for that period while for the rest of the period, he is paid a “nominal” amount. Replying to an email query, a company spokesperson in India said: “Oracle does not comment on speculation or rumours.”
The company is also understood to have asked all non-billable employees (those on the bench) to get themselves engaged in internal projects, failing which they can explore opportunities outside the company. It is not, however, clear whether the company is asking the non-billable resources to work for outside companies as contract employees while still on Oracle’s rolls, or to use their non-productive hours to make money for themselves.
Initially implemented for the employees of Oracle Financial Services Software (formerly i-Flex Solutions), Oracle India has reportedly implemented this across all its centres in India.
Oracle India, however, has not communicated this decision to employees in writing. The team leaders and project managers in different centres have been informed about the decision orally.
“They are telling us that while many companies lare aying off employees, Oracle does not want to take such extreme steps. They are saying that once things start improving, we will be back to all the usual compensation and allowances,” said a senior employee of Oracle India on condition of anonymity.
Second quarter results announced last month show that Oracle had been able to maintain its profitability despite nearly flat revenue growth. Oracle’s net income fell half a per cent to $1.27 billion in the second quarter and sales were up 5.5 per cent to $5.6 billion, lower than analyst estimates. Revenues from new software licences, which is an indicator of future sales, were down 3 per cent to $1.6 billion.
Following its acquisition of i-Flex, sources also note that there were plans to lay off all employees of that company, a decision that was scrapped following intervention of Oracle’s management. Oracle feared that the lay-off of all i-Flex employees might suggest the failure of the M&A — an area that has been mastered by the California-headquartered company over the years.
Sources added that Oracle India has cancelled employee travel costs and withdrawn free snacks and food. Despite news that the company has not stopped recruitments in India, freshers who were given offer letters for annual packages of Rs 2.4 lakh to Rs 2.5 lakh earlier are now being asked to consider packages of Rs 1.5 lakh to Rs 1.8 lakh.
Folks, remember, this is the i-flex part of oracle that the news refers to. And it is no secret that the services arm of i-flex needs to brush up on profitability as compared to the products arm. The only way that can be done in current circumstances is to reduce costs. So it is quite certain that the company would be looking for innovative solutions to reducing costs. Besides the services section is not the most liked business model by the parent oracle company and which means that the business heads managing the services division have to do so much more to please the parent company management. Under these circumstances, nothing can be ruled out...
By writing such things, you are making sure people do not read another single word with trust or credibility from this website. What a waste of time..... What a big non-sense?
\"....to work for outside companies as contract employees while still on Oracle?s rolls, or to use their non-productive hours to make money for themselves.\"
The best non-sense which will never happen not only in Oracle but any other IT company... Business Standard is writing News or Screenplays???
Total .. Nonsense..No Such plans yet ..Confirmed from Oracle Officials
Posted by: John
January 23 , 2009, 15:11 IST
\"No Such plans YET\" the operative word here is YET. The announcement will definitely come. If you look into oracles history, you will find they love laying of employees in thousands.
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