Search the Internet          Tips  Sites: Finance, Investment

1,000 Wipro techies benched; utilisation rates down

Fakir Chand in Bangalore

India's richest billionaire and Wipro chairman Azim H Premji on Friday disclosed that about 1,000 software employees of the company have been benched so far during the current fiscal year as a direct fallout of the global technology meltdown, especially in the US.

"About 10 per cent of our total employees in Wipro Technologies have been made to sit on the bench. In order to engage them resourcefully, we have launched 'Operation Bench press', which focuses on customer investments, internal projects, training and innovation initiatives," Premji told the media after the financial results for the first quarter were declared earlier in the day.

On the utilisation front, Premji and his vice-chairman Vivek Paul have told rediff.com that gross utilisation of its IT employees would see a marginal decline in the coming quarters due to drop in project executions, including offshore and onsite works.

"During the first quarter, the gross utilisation was down to 60 per cent from 66 per cent that was averaged during the preceding fiscal year. We foresee that the utilization rates going down in the coming quarters," Paul said.

The Bangalore-based global software-driven company has also deferred the joining dates for campus recruits in the first quarter, ending June 30, 2001.

"During this month, however, we have absorbed all the MBAs to whom offers were in the recent past but deferred earlier," Premji stated.

Premji also admitted that the hiring plan for this fiscal year would be based on business flows.

"We are confident that the campus offers made for the year will be recruited in the remaining quarters," he added.

Neither the number of MBAs taken nor the number of campus offers made was, however, disclosed. In the meantime, the company has provided access for the prospective employees to its Intranet and e-learning facilities for enhancing their skills.

At the same time, Premji sounded upbeat over the company's overall performance during the year under review and projected that the performance would be above the industry growth rates.

"In support of my statement, I am pleased to inform that Wipro Technologies, the group's global systems integration business, has bagged a whopping $70-million contract from the telecom subsidiary of Lattice Group plc, a FTSE 100 company," Premji declared.

According to Paul, the contract is not only the biggest ever bagged by any Indian IT company, but also the largest ever got by Wipro.

"It was a global competition in which 6 players participated in the bidding, and two were short-listed, but Wipro emerged to win the contract," Paul told rediff.com, but refused to disclose the name of the rival bidder which last out.

The contract is part of the Lattice Group's Pound 460-million project to install the UK's national fibre optic backbone network.

"We will generate a revenue of $30 million during this fiscal through sale of hardware and networking products, and the balance $40 million will flow in during the coming two years as they are largely related to software development and installation," Paul affirmed.

Premji also disclosed that the company had short-listed a few candidates (read clients), primarily in the US for acquisition. He, however, did not specify any time frame for the acquisition process to complete.

"You can be rest assured that the expenditure budget for the mergers and acquisitions team is not under the scrutiny for reduction," he asserted.

According to company's chief financial officer Suresh C Senapati, expenditure across the board, barring M&A team and the sales and marketing team, will witness a slash for cost-effective spending.

Commenting on the performance during Q1, Premji said in the current environment, the company had the option of using price plays for getting volumes versus the tougher and long-term beneficial approach of focusing on value, leveraging its technology skill sets and Six Sigma Quality approach to delivery.

Of the Rs 5.21 billion revenue generated during the first quarter by the group's flagship company, Wipro Technologies, the top one customer had contributed about 8 per cent revenue, while the top 5 customers gave a business of 29 per cent, and the top 10 around 42 per cent.

"Repeat business was 98 per cent and new business was only 2 per cent, that too coming from 25 of the new customers the company bagged during the quarter under review.

It may be recalled the company had declared earlier in the day that its revenues for Q1 of fiscal 2001-02 were Rs 7.98 billion, and net profit of Rs 2.41 billion, registering a growth of 28 per cent and 93 per cent, respectively.

Money

Business News

Tell us what you think of this report