Hyderabad-based Satyam Computers is all set to follow in rival Infosys’s footsteps in order to cut costs during the period of global slowdown, which is set to continue in 2009.

However, unlike Wipro or Infosys, Satyam doesn’t have plans to increase work hours, and nor is it interested in sending e-mails to its employees asking them to save $10 each. Instead, the company is planning to send its employees on a sabbatical, and is most likely to take the final call after its third quarter results are out. Depending on the results, Satyam will confirm the sabbatical plan.

The software exporter has already scaled down its hiring projection for the current fiscal year to around 8,000-10,000 from the 15,000 that it had earlier projected.

SV Krishnan, global head (HR), of Satyam Computer Services, said, "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."

Krishnan also said that if the third quarter results are in line with expectations, the company may not adopt drastic cost-cutting measures.

Shifting its 47,000 IT employees to the BPO arms is not a viable option, as it is engaged in specialised works, said Krishnan. The total headcount of the company is around 53,000.

Earlier, Infosys also asked its employees to take up to one year of sabbatical to engage themselves in philanthropic activities, and said that employees who take up the opportunity will continue to draw 50 per cent of their salary.

Harit Shah, an IT and telecoms analyst  with Angel Broking, feels programmes of this kind will help IT firms cut costs as their major market, the US, is facing recession. “Visibility from the US market is still not clear, and firms are under pressure to cut costs. It has triggered IT firms to look at ways to trim costs,” he told the Economic Times.

Krishnan had earlier said that the company could also take another look at the guaranteed component of the variable pay given to its employees. At present, the wage bill accounts for over 60 per cent of company’s revenues. "Employee-related expenses account for almost 55-60 per cent of an IT firm’s total spending cost. They have tried to cut those expenses by scaling down hiring projections. Sabbatical programmes will help reduce costs further," said Shah. X

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