Satyam looking at measures to cut costs

22 May 2009 PTI


NEW DELHI: Concerned over rising cost hitting the revenue, Satyam Computer on Friday said it is looking at cutting down costs.

"The customer front is good, stable. But costs are high... the revenues would be less," company Chairman Kiran Karnik told reporters after a meeting with the board members and officials of Tech Mahindra, which is taking over Satyam Computer.

The company today discussed a host of cost-cutting measures that can be explored.

Tech Mahindra Chief Executive Vineet Nayyar said Satyam had 10,000 excess employees in its 40,000-strong headcount.

"The company has 10,000 excess staff. We are looking at least painful ways to take care of this," Nayyar said.

On the other hand, Karnik said the company is not looking at layoffs, it is exploring sabbatical and virtual bench strategy.

Karnik said today's meeting discussed the challenges to the bottomline, how to handle (excess) people, HR and real estate among others.

Satyam witnessed a flurry of client loss following its disgraced founder Ramalinga Raju's admission to multi-crore rupees accounting fraud in January.

Today Satyam shares surged by 11.54 per cent on the BSE.

Last month, Tech Mahindra had acquired 51 per cent in the Hyderabad-listed Satyam through an auction for Rs 2,099 crore.

Karnik said the new auditors Deloitte and KPMG made presentation today at the meeting and said it would take minimum six months for restatement of company's accounts.

On the protracted legal battle with UK-based mobile solution firm Upaid, Nayyar said an out-of-court settlement is favourable and the company would explore that option.

Meanwhile, in a filing to the Bombay Stock Exchange, Satyam said four nominee directors of Tech Mahindra, including its Chief Executive Vineet Nayyar, have been today appointed on the board of the company, with effect from June 1.

The other three nominee directors on behalf of Venturbay Consultants (an arm of Tech Mahindra), include C P Gurnani, Sanjay Kalra and Ulhas N Yargop, Satyam said.

Gurnani currently heads Tech Mahindra's global operations, Kalra is President Strategic Initiatives while Yargop is President for IT sector and a member of the Group Management Board of Mahindra & Mahindra.

"Following the effectiveness of the appointment of Venbturbay Directors, there will be a total of 10 directors on the board," Satyam said.

In January the government had appointed Kiran Karnik, Deepak Parekh, C Achuthan, Tarun Das, T N Manoharan and S Balakrishna Mainak on the board of Satyam Computer after its founder Ramalinga Raju disclosed of a multi-crore financial fraud in the company's books of accounts.