Hyderabad, April 14: Tech Mahindra, the new owner of the fraud-hit Satyam Computer Services Ltd, would require another two years to put the once-fourth-largest IT company on track.
Though the company is celebrating the completion of one-year of “success” after taking over Satyam, the top brass feels there is a lot to do before Satyam can hope to compete with other companies in the sector.
“The company needs another two years to level out. We have just completed one year of the three-year transformation plan we had. Within the next two years, the operational metrics would be put in place,” Satyam’s CEO CP Gurnani said.
Satyam, which operates with the Mahindra Satyam brand after Tech Mahindra took it over post the unveiling of an accounting fraud committed by Satyam’s founder B Ramalinga Raju, has been going through a major restructuring.
According to Gurnani, several unwanted structures set up in the company during the Raju regime have been dismantled. “There were 14 layers of management earlier. We have reduced them to seven. This helps the management in many ways, including ensuring better transparency and more availability of data,” Gurnani said.
Calling what was done on Satyam by Raju a “huge scam”, Satyam’s chairman Vineet Nayyar said there were no doubt that the deadline set by the Company Law Board for restatement of accounts would be met.
The company has been asked to complete the restatement of accounts by June this year.
The company is said to be struggling with high rate of attrition, with several senior employees jumping off the ship. While a senior official maintained that the attrition was in line with the industry average, he said the current headcount was about 28,000.
The company had 53,000 people at the time Raju confessed to committing the accounting fraud by inflating the balance sheet with non-existent revenue and interest income.
“We are planning to hire about 4,000 people this quarter. We have already absorbed about 3,000 people from the virtual pool that was created last year,” the official said.
Satyam had created a virtual pool to place about 8,000 additional employees. While about 3,000 people from this pool are believed to have quit the company, another 2,000 were rebadged for placing with Satyam’s clients directly. Satyam on its own has absorbed about 3,000 employees.
The recruitments planned for this quarter and the next two quarters would also focus on the hiring needs for the special economic zone (SEZ) operations. However, the details of the SEZ operations and the cost to be incurred on building it are not known yet.
Meanwhile, Satyam has commenced work to build a SEZ near its existing premises in the IT district of Madhapur on the outskirts of Hyderabad.
To be set up in about 26 acres with about four lakh sq ft, the premises would seat about 5,000 employees. The premise is expected to be ready for occupation in the next six months.
–Agencies–