RETRENCHMENTS are taking its toll on the Indian IT industry and the latest to join the list is MphasiS. The IT & BPO services company, which is part of the $22-billion EDS, has reportedly shed around 200 people. According to sources, MphasiS has retrenched 200 employees at its Chennai centre and all this in a span of two days last week.
MphasiS, in response to this development, said in a statement: "The query is speculatory and as per policy, MphasiS, an EDS company, does not respond to rumours and speculation." It further added, "MphasiS continues to hire people to meet business demands. The company has grown from an 11,000-employee organisation in 2006 to over 27,000-strong in 2007 and the trend will be similar in 2008."
It was not clear whether this retrenchment was restricted to the Chennai centre or covered other locations. Sources said the retrenchment was largely centered around the performance issue and it has probably affected those who were on the bench.
The recent cases of retrenchment in IT majors like TCS and IBM have centered around performance issues. However, industry observers feel it is very difficult to pinpoint whether it is performance issue or the weakness in the market which are forcing companies to take this step. At the same time, there has been a lot of flab built into a lot many companies and this could be an opportune time to cut costs as employee compensation accounts for around 40% of a typical IT services company's revenue.
According to reports, EDS' quarterly profit fell 13%, hurt by the loss of key customer Verizon Communications, which decided to handle its own technology work. Sales in the Americas declined 8%, and operating profit in the region tumbled 28%. MphasiS was one of the first Indian IT services companies to be acquired by an MNC IT company. EDS also later merged its India operations with MphasiS.
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2 comments:
This is very true..confirmed by reliable sources within mphasis.
apparently no new projects are coming and the bench strength is proving too costly for them. People are being terminated without any reason being cited. Officially they are citing performance issues, but that definitely dosent seem to be the reason. People who were central to projects are being fired. As happened in mumbai office. As soon as a project was completed on its deadline, 80% of the people were fired. There was a farce reason provided by the HR that people were not ready to relocate, which isnt entirely true. Atleast 50 people have been fired from mumbai offices,both from bench as well as from projects, most of them without any valid reason(other than cost cutting).
Height of things, one person in chennai who was fired recently only recieved an email from the HR saying he was fired,not even a verbal communication.
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