HP has announced that it would be eliminating 24,600 of its employees. HP, in one of its Security Analyst Meetings stated that is a part of its global restructuring plans.

Many companies in the software, ITES or the EDS industry have been in a ramp down spree recently owing to inadequate projects, global slowdown and high competition. Companies have been showing the pink slip to employees in the name of performance issues. The economic slowdown has affected large companies.

HP’s plan to eliminate 24,600 employees is a huge and sensitive move for the organization. Mark, in one of his updates stated, “By far the hardest part of this effort is restructuring our global workforce and today we are announcing the elimination of 24,600 positions.  There is no way to downplay the magnitude of this.  The restructuring impacts people, families and communities, and we undertake it with gravity and deliberation.” He also added, “We have the well-being and futures of more than 300,000 employees to consider, and we owe it to all of them to create a business that is healthy, strategically sound and growing.’

The huge amount of eliminations shows the state of the company and the seriousness of employees without projects. Companies are no longer able to hold on to an employee if he/she is not billable even for a month.

The situation has been wide spread among all similar service companies. Industry experts feel that the same heat wave would prevail for further months. Hope we see the light soon in the end of the tunnel.

Satyam Computers, one of the leading software companies in India has joined the list of companies who are in a rapid down-sizing due to inadequate projects.

Satyam has reportedly shown the pink slip to 400 engineers and associates in Hyderabad, Visakhapatnam and Pune.

Most of the employees who were sent off had 2 to 5 years of experience. The employees in a state of shock were aware that things were not so good recently. Many of its employees were in bench for months as Satyam fell short of projects.

Following this, Satyam had been requesting [well, you can even say forcing] employees to get into a contract instead of a permanent employee status in the name of performance issues. Quite obviously, employees did not prefer this option.

After preparing enough reasons against its employees, Satyam showed the way home to 400 employees and associates in its so called ‘S’ band. Employees who have 2 to 5 year experience fall under ‘S’ band in Satyam.

Joining the league of layoff companies, Global Head, HR came up with the same boring answer. He stated to The Hindu that ‘we do this as a matter of routine employee evaluation and development.” He also added one that we are quite used to hearing recently, “We are to hire 12,000 to 15,000 people for 2008-2009″. Can you please stop joking?

Were there performance issues only with the ‘S’ band? Why did Satyam send such a large number of employees only this year? Does that mean they did not have any performance issues last year? If you are going to send off 400 experienced employees and recruit 12,000 more, does that mean that these 400 cannot perform or are good for nothing? Or can we say that you don’t have suitable projects to see their performances?

Can’t these HR come up with a different answer? Obviously, even a dummy will know the real reason. “INADEQUATE PROJECTS”

24/7 Customer on a phased ramp down

After software companies, its now BPO companies who are on a slow down. 24/7 Customer one of India’s leading BPO firms have informed that they would carry out a phased ramp down of their offshore call center partnerships in India.

24/7 has planned to reduce 450 employees in Gurgaon and would also assist the employees to find employment opportunities outside their company. More than 70% of its employees are already on a lookout for other opportunities.

But as all companies say, the company also claims that it will increase its workforce from the existing 7,500 to 10,000 employees by May and it is already hiring in India, Guatemala and Manila. These claims have become common with most of the companies to cover their real skin.

President of New services and Global Chief of Risk and Infrastructure stated that they have taken all necessary steps to help employees pursue careers in other centres.

Industry analysts feel that the current slow down in the market can no longer help companies afford having employees in bench. They do have to ramp down employees in the name of performance review and cover their real cause with news about increasing work force.

The BPO has its head office based in California with its Indian call center operations in Chennai, Bangalore, Gurgaon and Hyderabad.

India’s 6th largest software exporter, Patni Computers has recently laid an estimated 600 employees. The company claims that this action is due to their non-performance issues. However, industry watchers have mentioned that it is largely due to insufficient projects.

Patni with its delivery centers in Chennai, Bangalore, Mumbai, Pune, Noida and Hyderabad is one of the largest software exporters. During its recent yearly appraisal, the employees were shocked to receive a forced resignation letter instead of a appraisal letter. The company informed this to be an exercise to weed out non-performers.

Executive vice president and global head of Patni Human Resources stated,  “This was an absolutely regular appraisal that is important for any performance driven organization. It is something standard we do every year. Employees who have got a 0-1 rating on a scale of 5 typically form the basis for the first-level shortlist. These are performance based resignations; we’ve not issued any termination letters.”

An industry expert from Bangalore mentions, “IT companies have to concentrate on educating business developers. IT companies spend huge amounts on business developers. However, they tend to be inefficient and do not have much knowledge about the product they sell. They either quote too high prices for simple jobs or sign for less when it would actually cost more. Both ways the company either loses the project or ends up in additional expenditure”

Software companies are facing a crisis in recent years due to incapability of acquiring new projects. Laying off employees in the name of performance issues has become quite common among IT companies to cut costs.