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Philips to increase staff at Indian software unit

Dutch giant Philips Electronics NV plans to increase the staff at its Indian software subsidiary by 30 per cent in a bid to capitalise on the country's highly skilled, but relatively cheap software workforce.

The Bangalore-based Philips Software Centre, fully-owned by the Dutch company, is targeting an employee strength of about 1,000 by 2004 from around 750 currently, chief executive officer Bob Hoekstra told Reuters in an interview on Monday.

But he said most of the employee additions would be made in 2001. The expanded staff will be about 20 per cent of Philips' global strength of around 5,000, he added.

"The past five years has seen a tremendous growth in our businesses," Hoekstra said. "This year, we are targeting a 15-20 per cent growth in turnover."

Philips Software develops and supplies software for the electronic giant's worldwide operations. It has six divisions: consumer electronics, semiconductors, medical systems, research, industrial technology and components.

It Philips' largest software facility in terms of employee strength and posted a turnover of Rs 1.24 billion ($26.32 million) in 2000.

TECH SLOWDOWN

Like other software companies, Philips has been hurt by the global slowdown in technology spending. Recruitment was initially slated to rise by 50 per cent in 2001, but that figure has now been pared to 25 per cent, Hoekstra added.

But he remained bullish about long-term prospects, citing strong demand from other Philips divisions.

"The negative impact of some business decisions made by Philips on our activities is more than balanced out by the growth in some of the divisions. Medical systems, to name one, is having tremendous growth."

He said India still remains attractive as a base for outsourcing software despite competition from other developing countries.

"The flexibility of the engineers, the fluency in English, the great educational institutes, the government support and the large number of companies creating a learning environment are a huge barrier for other companies to copy," he said.

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