Bangalore-based IT firm MindTree today said it will cut salary by 15 per cent of about 200 staff in the research and development (R&D) division to reduce costs amid the global economic slowdown.
"The utilisation levels had fallen below 60 per cent and hence the decision to cut salary by 15 per cent was taken. This would be applicable on employees in the R&D services, who are neither on an customer-approved project nor on an internally-approved project," MindTree Senior Vice-President and Global Head (People Function) Puneet Jetli told PTI.
The cut would be applicable from August 1, 2009, and affect about 150-200 people, he added. MindTree employs 1,100 people in the R&D division.
"This salary cut is, however, for a short-term. The salaries will be restored if the employee gets assigned to a customer project or the utilisation levels cross the threshold of 65 per cent," Jetli added.
He said selective pay cut was better than measures like layoffs, across-the-board pay cuts or putting people on the 'virtual pool'.
Jetli said the company expected a turnaround soon. "There are signs of recovery. There might not be a drastic growth, but the situation is stabilising," he added.
Despite a net profit of Rs 54.54 crore in the first quarter of FY10, MindTree, in view of the continued uncertainty in global markets, has revised its revenue guidance for this fiscal to $255-270 million.
