Satyam Firing Workers 'Onsite,' Analyst Says

[OhioChick]

The scandal-plagued outsourcer is also virtually broke, a new report states.

January 15, 2009 03:16 PM


Beleaguered Indian outsourcer Satyam, whose chairman earlier this month admitted falsifying profits and revenue by more than $1 billion, is perilously close to running out of cash and is laying off employees summarily in a desperate effort to remain solvent, an analyst said in a report issued Thursday.

"The financial situation at Satyam is indeed dire, with inside sources confirming that the company lacks sufficient working capital to meet current expenses and employee salaries for this month," wrote Hansa Krishnamurthy Iyengar, an analyst at U.K.-based advisory firm Ovum.

To save money, Satyam is "firing employees onsite" in the United States, Australia, New Zealand, and Europe, Krishnamurthy Iyengar wrote, citing third-party news reports.
Satyam has claimed to have more than 53,000 workers worldwide, but the analyst said the real number is "far fewer."

On Thursday, Indian Economic Affairs Secretary Ashok Chawla told reporters that his country's government doesn't plan a Satyam bailout. "The government at this stage is not looking at any direct support or bailout to the company," Chawla said, according to news agency Reuters.

Last week, IT advisory firm Gartner warned Satyam customers to prepare for the possibility of the disgraced outsourcer's demise and related service disruptions.

http://www.informationweek.com/news/management/outsourcing/showArticle.jhtml?articleID=212900794

Wonder how much money Ford will lose over this debacle? Maybe they'll learn that outsourcing isn't so great, afterall.

[teknomanzer]

1. Who are Satyam's clients...

I'm interested because I have worked tech support here in the US - I'm wondering if Satyam's failure will bring some needed jobs back home.

[OhioChick]

2. Ford, GE, Nestle,

"Now companies like General Electric (GE) and Nestlé are hard at work assessing their exposure to risks if Satyam goes under."

Apparently, many clients aren't disclosing:

"Satyam has about 550 to 600 clients; those contacted for this article did not want to talk about their business with Satyam."

http://www.businessweek.com/bwdaily/dnflash/content/jan2009/db2009019_127597.htm?campaign_id=rss_daily

[DBoon]

3. Now that they have gutted domestic IT capabilities

by laying off thousands of capable American in order to outsource, they find their outsourcer has vanished

Karma is terrible, isn't it

[OhioChick]

4. That it is. n/t

[Caretha]

8. Just terrible

Nothing like watching karma in motion. "Globalism" at its finest. Unfortunately these poor souls in India, just like the common worker in America will suffer too.

[DBoon]

9. workers of the world, unite!

as long as they can play one nation's workers against another's, we will lose

[peacetalksforall]

5. Which IT companies are affected - what are our risks if it all shuts down?

[peacetalksforall]

6. I now see Ohio Chick's answer in her link to Business Week - looks like it has some answers.

[Azlady]

7. My, my, I sure hope some of those jobs come home n/t