Satyam to cut cost, may lay-off 5,000 employees

Satyam is bulging with at least 10,000 employees who are not needed and half of them could lose their jobs.

With Tech Mahindra as the new owner, it's wait and watch for Satyam employees as plans to rationalise cost is chalked out.

"It is more than 10,000 people. Some form of less painful way of reduction of staff is an option which will have to be looked at," said Tech Mahindra CEO Vineet Nayyar.

CNBC-TV18 learns Tech Mahindra may be forced to let go of 5,000 employees. Sources say that out of 12,000 employees on the bench 7,000 employees are currently in-between projects, 500 are on unpaid leave and sabbaticals, and the remaining 4500 are under training.

"Satyam has the largest number of manpower. Compared to the billing, it has the largest number of manpower than any other IT company. So some amount of rationalisation is unfortunately absolutely necessary to make the company viable again," said Satyam board member Deepak Parekh.

When contacted, Satyam said, "There is no official number that has been stated at this point and the information is speculative."

Industry experts say that the lay offs are likely to start from Hyderabad, which has the largest number of employees.

The number may go higher than 5,000 as well but Tech Mahindra is taking efforts to work out ways to reduce the number of lay-offs and use other methods like sabbaticals and increasing virtual bench.

Meanwhile, the new Corporate Affairs Minister Salman Khurshid in an exclusive interview with Network18 spoke about the need to phase-out the government nominees from Satyam board.

The Minister is also unhappy about the proposed lay-off in Satyam.

"It is very easy to be on an extreme and say we won’t let you lay-off people. And it is very easy to say in an extreme tone that you can lay off if you like we have nothing to do with it. The government has to take a middle path to say, please lay off keeping in mind that this is a sensitive human issue. The government can’t, however, also say that it doesn’t matter if the company collapses, you don’t lay off anybody. The objective is survival of the company. They are hard decisions that are being taken and have to be taken," said Khurshid.