chitti on March 29th, 2011 | 775 views

Satyam Computer Services Ltd will recruit from campuses for the first time in three years as it looks to improve its low operating margin.

Tech Mahindra Ltd acquired the fraud-hit information technology firm two years ago and rebranded it Mahindra Satyam.
The company has made offers to nearly 3,000 fresh graduates along with Tech Mahindra, which plans to hire a similar number.

"While the global economic crisis deterred us from hiring from campuses in 2008, the fraud which broke out at the firm and the subsequent acquisition by Tech Mahindra was the reason why we did not recruit freshers in 2009 and 2010," said Hari Thalapalli, chief marketing officer and chief people officer, Mahindra Satyam.
The company has around 30,000 employees, up from 25,000 in March last year. Satyam had 50,000 employees before its founder and then chairman B. Ramalinga Raju declared, in a letter to Bombay Stock Exchange on 7 January 2009, that he had fudged its books to the tune of at least ’7,136 crore over several years.

A.S. Murty, chief technology officer of Mahindra Satyam, said freshers would boost the company’s operating margin. "This (recruitment) will expand the base of the employee pyramid and help us deal with the bulge in the middle, which the firm has accumulated in the last few years," he said. Entry-level employees are paid ’3-4 lakh a year, reducing the average cost of delivery for the firm’s clients.

In the three months ended 31 December, the company earned a revenue of ’1,280 crore, up 3% from the preceding quarter. Net profit was ’58.9 crore in the December quarter, up from ’23.3 crore. But earnings before interest, taxes, depreciation and amortization, a measure of operating profit, stood at 6.8%, which is quite low compared with industry standards.

"Due to the fraud and the subsequent troubles at the firm, Satyam could not react fast enough to the changing industry dynamics during the global economic crisis, which is the reason for its low growth and margins numbers. But now it has to work towards a more pragmatic approach," said Chandranshu Singh of Ovum, the information, communications and technology consulting arm of the Datamonitor Group.

IT (information technology) firms hire a number of freshers to keep expenses low and counter attrition. Tata Consultancy Services Ltd and Infosys Technologies Ltd, India’s two largest IT vendors, plan to recruit 37,000 and 26,000 freshers, respectively, in fiscal 2011-12.

Source : One-Source Mint

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