Tech M to review 'surplus employee' in Satyam

Tech Mahindra, the new buyer of Satyam Computer Services, will review the “surplus employee” situation in the latter on May 15.

Analysts believe the number of “surplus” employees is between 6,000 and 12,000. The situation has arisen as Satyam was once a $2.2 billion company with over 50,000 employees. Though the accounts have not been restated after the revelation of forgery by its ex-head, Tech Mahindra) officials peg the revenue at around $1.3 billion. Why would Satyam need the same number of employees when the turnover has almost halved, ask analysts.

“It is indeed a situation. We’re discussing it with the boards of both the companies. We will try to look at growth opportunities and see if we can balance it out by ramping up (getting more) business. We will review the situation on May 15,” said CP Gurnani, president (international operations) of Tech Mahindra, who is now also on the Satyam board. The two boards met in Hyderabad today to discuss operational issues.

Tech Mahindra and Satyam would continue to function as standalone companies “till the shareholders take a call,” said Gurnani. “For accounting purposes, we will consolidate the revenues and profits of both the companies. From an operational stance though, both these companies will continue to function independently. Tech Mahindra will broadly focus on the telecom services business, while Satyam will strenghten its focus on IT services.”

Gurnani also said that “subject to approvals from their respective boards, four-five senior management employees of Tech Mahindra would eventually move into Satyam while four-five Tech Mahindra senior managment members (looking a career change and who have till date been in manufacturing and finance) would move to Satyam.”

Currently, Tech Mahindra derives around 52 per cent of its revenue from BT. “Our aim is to make Tech Mahindra a one-stop shop for telecom services,” said Gurnani. The company is seeing a marginal growth in its non-BT business, which Gurnani attributes to the overall slowdown. “Else, we have done reasonably well this quarter,” he added.

Tech Mahindra, according to Gurnani, is following a 6-3-2-1 strategy. The number 6 stands for six engines of growth — chief information officers, remote infrastructure management, network services, value-added services, BPO and IT services. The number 3, he says, stands for three years, the 2 stands for a target of $2 billion and the number 1 for the numero uno space that the company wants in telecom services, customer-centricity and employee growth. “It’s a jingle that all our 25,000 employees have to imbibe,” he said.