Bengaluru-based IT outsourcing services provider MphasiS, an EDS company, is reducing hiring plans by almost 50 per cent.

At the beginning of this financial year, the company had guided the Street that it would recruit around 8,000 people. It now plans to recruit just 4,000.

MphasiS has historically been strong in the banking, financial services and insurance space. It derives over 40 per cent of its revenue from this sector. Two of the world's top five brokerage firms are its clients. AIG, which was recently bailed out by the US government, is also one among its customers.

Earlier this week, Hewlett-Packard -- which bought IT services company EDS last month -- said it would make 24,600 staff redundant over three years.

Jeya Kumar, Mphasis CEO, attributed the slowdown in hiring to a higher employee utilisation rate.

"Overall, hiring has slowed down in the industry. We tend to drive more towards productivity and operational improvements rather than hire more numbers. Over the last eight months, we have driven up our utilisation rate 10 percentage points. That's why we need fewer people now," he said.

Kumar admitted that though the company did not see any immediate impact from the global financial crisis, the effect going forward could be 'severe'.

"In the last few quarters we noticed that clients have not cut back on projects but the decisions are taking longer. Given what has happened over the last seven days, we expect the decision-making process to take even longer," he explained.

Perceiving the sluggishness in the BFSI sector, MphasiS is now focusing on other sectors.

"Anyone who uses money to do business will face some kind of impact due to the credit crunch, though it is most pronounced in financial services. Still, we see good growth in telecom, manufacturing and healthcare, which will keep us in business," he added.

In 2007-08, the MphasiS group recorded revenues of Rs 2,423 crore with a net profit of Rs 255 crore. The company which derives close to 60 per cent of its business from the US, and 25 per cent from Europe, is planning to focus more on the Asia-Pacific region to maintain growth.