Oracle India trims salaries with hour-based payments

"Oracle India trims salaries with hour-based payments" - This is the heading of a report I read today on business standard. Couple of paras from this report are given below. They had also mentioned that the employees, while still being on the Oracle payroll, can take up contract work. These guys are effectively suggesting employees to look for a new job without actually forcing them to do it. Its good in one way that if you stick it out for next few months then the situation will be back to normal.

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.

Satyam plans to send staff on sabbatical to trim costs

"Satyam plans to send staff on sabbatical to trim costs" - This is another headline that caught my eye today. They are doing an infosys and want to send employees for social causes and they will make a final decision on this based on the third quarter results. The following is the snippet from the news report

The company is looking at sending its employees on a sabbatical, but will take a final decision depending on the third-quarter results. Satyam has already scaled down its hiring projections for the current fiscal to around 8,000-10,000 compared to 15,000 that it had earlier projected.

“We are looking at various options to reduce costs and sabbatical is one such option. We will be able to shift our employees to take up social activities relating to our own corporate social responsibility programmes. Employees can also look at working with NGOs during the time of sabbatical. But, they will have to compromise on their salary during sabbatical as the pay structure will be lower than what they are currently drawing,” said SV Krishnan, global head (HR), Satyam Computer Services.

Indian IT and BPO has an Union to take up layoffs and long working hours

Here is a story from businessstandard that caught my eye today. I did not know about such a body until today and its heartening to see it take up some of the concerns

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The Indian arm of the Union for Information & Technology Enabled Services (UNITES) is planning to file a public interest litigation (PIL) against the alleged “arbitrary policy’ of many Indian and multinational IT/ITeS firms in India who have, for the past two months, reportedly been enforcing longer working hours that violate the daily eight-hour working mandate of the Indian Factories Act, 1948.

UNITES, the country’s first union in the IT-BPO sector, is affiliated to the Indian National Trade Union Congress (Intuc). It claims to have around 10 per cent of the total IT-BPO workforce of 2 million as members, and said the numbers have been dramatically rising over the last two months on the back of lay-offs in the sector. The union is also part of Union Network International (UNI), which has over 16 million workers in 13 different sectors from 163 countries.

IT firms, on their part, insist that the Act is not being violated since IT workers have to work for 48 hours a week — eight hours daily for six days. However, since most IT firms have a five-day working week, they work longer hours, hence the misconception.

But some IT-BPO employees and UNITES are not buying the story. “The labour law in India allows an eight-hour working day, whereas in most IT companies in India people are involuntarily working for over 12 hours daily,” R Karthik Shekhar, UNITES’ secretary general for India told Business Standard.

He added that the increase of daily working hours from eight to almost 10 hours by Indian and multinational companies officially is “a double standard by the IT firms, who, on the one hand are firing people saying they are not getting enough work, and on the other hand, forcing employees to work more since they are getting more work”.

He said UNITES has requested industry body Nasscom to step in to clarify the stance.

The IT sector in India was once the torchbearer of many best HR practices, including flexi-office hours.

However, the situation has changed on the back of a slowing economy. Global IT services firm Accenture, for instance, is reportedly planning to increase working hours by almost an hour with effect from January 1 next year. Infosys, India’s second-largest IT exporter, too, has asked its employees' to strictly abide by the duty hours that the company has fixed as 9.15 hours a day on all working days. Wipro also has stipulated 9.5 hours working hours a day, and is becoming much stricter in terms of timing.

On condition of anonymity, a team leader working with vCustomer, said: “In call centres people are used to long working hours. During peak season (December-January), they work even 14 hours a day. But now due to the ongoing crisis, expectation levels are very high. Performance is being monitored frequently.”

A software engineer with Satyam Computers, Hyderabad, added: “Earlier we could extend our project deliveries by a day or two. Now the management has mandated to deliver by the deadline otherwise it will be marked on performance sheet. Our performance is being evaluated every week. This was a norm from earlier times, but now the management is taking it seriously.”

An engineer from Orange (which does IT and BPO support for the telecom major), concurred, “Besides the long working hours, cost cutting measures are worrying us, and the company has started ferrying seven people in a cab against five earlier.”

An account manager placed with Barclays in Noida, said “The insecurity level is very high. Quality parameters have been raised and everything is monitored very closely, they are marking us down wherever they can.”

Shekhar alleges that most IT firms do not display a “standing order” (regarding the eight-hour duty), which is certified by the labour department, on a notice board at the entrance of every firm. Instead, they have the order posted on the company’s Intranet.

“I believe stressing on increased input is always a mistake — the industry needs to focus on more productivity and value creation on the output side,” said Ganesh Natarajan, Chairman, Nasscom, when contacted. He, however, did not comment on whether Nasscom would be working on fixing a limit on daily working hours for companies.

“The IT industry in India still follows the best practices it had introduced earlier. But this does not mean employees will work less. If they are being asked to stick to duty hours, this will increase the productivity,” explained Infosys Technologies HR head TV Mohandas Pai.

“Besides,” he added, “they are also being paid well to work hard. These are difficult times and if they don’t work hard then there will not be any industry left in coming days.”

Is TCS the worst affected Indian IT major in the ongoing financial crisis?

Is TCS the worst affected Indian IT major in the ongoing financial crisis? This is a question that came to my mind when the TCS stock was getting hammered on the bourses. I thought so since they are huge and have a larger share of their revenues coming from the Financial Services. This is reflected in the share price already. Today I saw this report that confirmed this view. According to this report TCS is likely to bring down the hikes to 0% by 2010 and it also shows how its competitors are doing in this front

For now, the other IT services majors like Wipro has already announced a 7-8% hike in wages for its offshore employees while for Infosys it has been in the range of 11-13%.

I also heard unconfirmed news about HCL not giving the hikes and, worse, even cutting the salaries. News about lay offs are not good for anyone except for the markets which is a positive since its going to cut down costs and improve profitability.

Infosys had come up with a sabbatical policy yesterday which is innovative. We have to wait and see what measures other IT majors will take to cut costs.

RK