The new chief executive officer of the scandal-hit Satyam Computer Services Limited, AS Murty, has asked the company’s employees (associates as they are called) to reduce, avoid or defer operational expenses wherever and whenever possible "to keep the company’s business running smoothly and competing effectively in the market for new business".
"The global economic condition and outlook remain dismal, even as we begin our own financial recovery. This means, our challenges are extraordinary, and meeting them will require extraordinary efforts. To do this, we must control costs and conserve cash ... and the Task Force has reviewed and recommended a few action points," he said in Newstoday, the company’s internal newsletter to its associates, on Thursday.
These include cutting costs onsite (high-cost countries). As a policy, pre-sales, solution architects, delivery support and operations support personnel will be located in low-cost countries. "Exceptions to this rule will be rare, of at all, and considered on a case-to-case basis," Murty said.
Satyam has also asked all its business units to sharply reduce non-billable domestic and international travel by more than 60 per cent. While unavoidable travel will continue for consulate appearances, visa stamping etc, virtual meetings will be adopted wherever possible.
"Business class travel – where permitted – is suspended until further notice, and hotel stays are suspended for all associates in cities where Satyam has guest houses. As much as possible, overnight stays to be based on absolute need. Besides, for associates at their base stations, the use of car services for intra-city conveyance is suspended and associates are encouraged to use their personal transportation and claim eligible reimbursement, or hire a ‘call taxi’. For associates onsite, the use of public transit (tube trains and trams) is encouraged. Limousine service is suspended," the new CEO said.
Satyam has identified several rented premises whose lease will be terminated to provide sizeable savings. This space is in excess and was invested based on anticipated growth. The company will be requesting associates on ‘business-wait-to-operate’ in shifts to optimise available space.
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Murty said the company has asked the employees to keep communication expenses to the barest minimum and utilise low-cost modes, while participation at events and conferences and business entertainment activities, external training and all advertising and marketing collateral expenses are being suspended. "All capex expenditures, unless required to meet customer deliveries, are being suspended till further notice. This includes time-bound renewal of laptops and office renovation," he added.
"These measures are necessitated not just because of our financial situation, but are relevant given the larger economic slowdown. Once our situation eases and conditions allow, we will revert to normal practices," Murty said.
Following is the AS Murty's mail to Satyam's global employees:
| Dear Associates: Over the last few days, I have been interacting with many of our customers – of differing size, representing different industries and locations. Almost without exception, they tell me the same thing, over and over: how our service remains excellent – even in the face of extreme difficulty – and how very impressed they are with your professionalism and dedication. |
These inputs act as a reminder – not that one was needed – that Satyam is a very special place with very special people. I really do feel enormously privileged to serve you at this time.
Two things are very clear to me. First, we can – and we will – rebuild this great company. Already, we are winning fresh orders from new customers. This is a very strong sign of renewed confidence in Satyam, and shows that we can eventually compensate the few loses we have seen to date. You will learn more about these wins later this week, in NewsToday.
Second, the global economic condition and outlook remain dismal, even as we begin our own financial recovery. This means our challenges are extraordinary, and meeting them will require extraordinary efforts. To do this, we must control costs and conserve cash; and the Taskforce has reviewed and recommended a few action points.
I am asking for your help to reduce, avoid or defer operational expenses wherever and whenever possible, beginning with the following items. I know this will mean personal sacrifices and inconveniences, but these should only be temporary, and will help us build a stronger and more competitive Satyam. Once our situation eases and conditions allow, we will revert to normal practices.
Onsite (high-cost countries):
* The current policy that provides for a maximum waiting period between projects of two weeks will continue. Compliance to this needs to be adhered to, totally
* As a policy, Pre-sales, Solution Architects, Delivery Support and Operations Support personnel will be located in low-cost countries. Exceptions to this rule will be rare, if at all, and considered on a case-by-case basis.
Travel:
* All units have been asked to sharply reduce non-billable domestic and international travel (by more than 60%). While unavoidable travel will continue (for consulate appearances, visa stamping, etc.), virtual meetings to be adopted wherever possible.
* Business class travel – where permitted – is suspended until further notice.
* Hotel stays are suspended for all associates in cities where Satyam has guest houses. As much as possible overnight stays to be based on absolute need. When guest houses are not available, hotel stays within eligible limits will be permitted. Requests for deviations from these limits are being completely discouraged.
* For associates at their base locations, the use of car services for intra-city conveyance is suspended. Associates are encouraged to use their personal transportation (and claim eligible reimbursement) or hire a ‘call taxi’. For associates onsite, the use of public transit (tube trains and trams) is encouraged; limousine service is suspended.
* For local conveyance while visiting another location within India, only “small car” service is permitted, regardless of the Associate’s level. The use of premium and luxury cars is suspended (except for visits by customers / dignitaries).
Communication:
Communication expenses are to be kept to the barest minimum and associate support sought to utilize low cost modes.
Marketing:
* Participation at events and conferences, and business entertainment activities are being suspended. In rare cases where exceptions are unavoidable, prior approval from the Group AIC (Associate-In-Charge) is required. All Advertising and Marketing Collateral expenses are suspended
Training :
* External Training is suspended for the time being. We will maximize use of internal training facilities and instructors. In rare cases where exception cannot be avoided due to customer requirements, prior approval of Group AIC is necessary.
Infrastructure :
* We have identified several rented premises whose lease will be terminated to provide sizeable savings. This space is anyway in excess and was invested based on anticipated growth. We will also be requesting associates on Business Wait to operate in shifts to optimize available space.
Capex :
* All capex expenditures – unless required to meet customer deliveries – are being suspended till further notice. This includes time-bound renewal of laptops, office renovation etc.
These measures are necessitated not just because of our financial situation, but are relevant given the larger economic slow-down.
Let us operate on the premise that every dollar has to be conserved so that our path to success is faster. All expenses that we incur should be questioned and when in doubt, it is preferable to seek clarifications than incur the same. Please be assured that these measures will not impede our ability - to keep our business running smoothly, and competing effectively in the market for new business.
We clearly recognize that these won’t work without your help and cooperation. We are confident that we can count on your cooperation and goodwill – which you are already demonstrating in the most trying of circumstances – and for that we remain very grateful.
Warm regards,ASM