In an effort to control costs, Chennai-based IT solutions provider Ramco Systems has decided to slash the salaries of senior managers by 10-15 per cent. The move is likely to affect close to 220 of its 1,663 employees.
This downward revision in salary comes close on the heels of a recent retrenchment effected by the company. In May, Ramco Systems had given the pink slip to 200 staffers or 10 per cent of its total workforce.
Kamesh Ramamoorthy, chief operating officer, confirmed the salary revision but claimed that the proposal was mooted by the executives themselves. Since the decision has been taken by the managers, it is unlikely to affect their morale he added. For Ramco, employees' salary accounts for nearly 65 per cent of the company's total cost.
“The salary revision is only for managers and above and not for any of our executives,” said Ramamoorthy. The revision has been implemented by converting certain fixed parts of the salary to variable pays.
Ramco Systems has been eyeing every possible way to trim its costs. “The idea is to become more profitable at an operations level,” he said.
The company had reported a lower net profit for the second quarter ended September 2008, at Rs 2.48 lakh against Rs 23.26 lakh reported for the same period last year. In 2007-08, Ramco Systems had reported a top line of Rs 204 crore and net profit of Rs 10.48 crore, or a margin of around 5 per cent.
It had reported a net loss of Rs 38 crore on a total revenue of Rs 272 crore.
For the last two years, the company has been investing more of its resources in technology and new solutions, said Ramamoorthy. “Though US and Europe are big markets, they are not big on growth now. Going forward, we will be focusing on the aviation sector in these two markets, which is a high area for us,” he said. The company expects to focus more on emerging markets like South Africa and Nigeria. On BSE, the company stock price closed at Rs 62, which is 3.73 per cent lower than Wednesday's close.
