EDS follows IT majors in trimming staff

Close on the heels of IT majors such as IBM, Yahoo! and Tata Consultancy Services, the US-based technology services provider Electronic Data Systems (EDS) too is understood to have asked around 130 people at its Chennai operations to resign on grounds of "non-performance".

The move, alleged employee sources, started somewhere in mid-January. While at least 80 employees were asked to resign over the past week, one company source asserted that as many as 300 employees were being asked to leave. The company, however, dismissed the employee allegations as pure speculation.

EDS employs more than 3,500 people in India and has applications and BPO delivery centres in Chennai, Pune, Gurgaon and Mumbai. The company employs over 27,000 people in the country.

An EDS spokesperson said, "The query is speculatory and as per policy, MphasiS, an EDS company, does not respond to rumours and speculation. MphasiS continues to hire people to meet business demands. The company has grown from a 11,000-employee organisation in 2006 to over 27,000 in 2007 and the trend will be similar in 2008."

MphasiS, which was merged into EDS in 2006, has BPO and delivery centres across multiple locations. According to sources, the employees were asked to leave after the performance appraisal.

"The employees were told that rupee appreciation pressures on project costs had put the company's bottomline under stress over the past six months. The plea of non-performance was also used by the HR personnel," the source said, adding that almost all the dismissed employees were on the bench when asked to leave.

"It is a combination of non-performance and high bench rates, though the overall employee utilisation rates have been satisfactory this fiscal," another company source said.

Sources could not confirm if any of the employees given marching orders at the Chennai operations were originally from MphasiS.