Zensar lays off up to 250 people
“A total of around 700 people have been listed, out of which 200 to 250 have already been asked to leave on grounds of non-performance. This is probably a cost-cutting measure as well,” a source said. It is understood that a internal audit conducted recently at the company recommended that it reduce its unused manpower.
This apart, the joining dates of many freshers have also been put on hold, sources added, without citing numbers.
“One morning, many employees got calls from the company saying that they would have to quit and employees leaving would get three months of their basic pay,” the source added.
When contacted, a company spokesperson said that the layoffs are part of a routine exercise where employees failing to perform even after sufficient training are “encouraged” to leave. “The figure would be 140-150 employees this time,” the spokesperson said.
The Indian IT industry, has of late, faced multiple worries as clients get increasingly tight-fisted in the face of the ongoing global economic slowdown, leading to intensified competition from peers.
Uncertain market conditions have also placed the outsourcing industry under huge margin pressure. Zensar, however, made profits of Rs 54.56 crore in first the quarter of fiscal 2013 ended June 30, 2012.
Kotak Securities’ Dipen Shah wrote in a client note on July 30, “Zensar’s results were marginally lower than estimates. US dollar revenues grew 2.1 per cent quarter-on-quarter, largely due to the higher amount of bought-outs. Volume growth, excluding bought-outs, was flat, we understand.”
Interestingly, announcing the fourth quarter results of the company for fiscal 2012 in April this year, Zensar Technologies CEO and Vice-Chairman Ganesh Natarajan had said, “What we are doing is like most of the companies we will be hiring close to 700 fresher trainees, but the good news is we are now staggering because we are not taking all 700 or 650 at the same time, they will come on a quarter-by-quarter basis.”
The company’s employee strength at the end of June was 7,286 people.
Natarajan had also said during the first quarter financial results announcement in June that the company would reach the $1 billion-mark by 2016.
However, sources said that Zensar of late has not been bagging many new projects and the dwindling number of projects is cause for concern to the employees as well as the management.