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Rajesh

Mahindra Satyam launched a Virtual Pool Program (VPP) to manage its talent amid the economic downturn after being taken over by Tech Mahindra. The VPP aimed to address excess staff costs while retaining talent within the company. It involved moving around 7,000-10,000 Satyam associates in India to a reserve pool with reduced pay for 4-6 months, during which they would receive training. This allowed the company to cut costs while keeping skilled workers engaged until business improved. The VPP was seen as an innovative alternative to layoffs that could help the company weather the downturn while maintaining its talent pool.

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138 views13 pages

Rajesh

Mahindra Satyam launched a Virtual Pool Program (VPP) to manage its talent amid the economic downturn after being taken over by Tech Mahindra. The VPP aimed to address excess staff costs while retaining talent within the company. It involved moving around 7,000-10,000 Satyam associates in India to a reserve pool with reduced pay for 4-6 months, during which they would receive training. This allowed the company to cut costs while keeping skilled workers engaged until business improved. The VPP was seen as an innovative alternative to layoffs that could help the company weather the downturn while maintaining its talent pool.

Uploaded by

amit kumar 121
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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MAHINDRA SATYAM

Virtual Pool Program: Managing


Talent in Downturn
MAHINDRA SATYAM: BRIFE INTRODUCTION

• Type – Public .
• Founded – 1987
• Headquarter – Hydrabad, India.
• Key People – Vineet Nayyar(Chairman)
C.P. Gurnani(CEO)
A.S. Murty(CTO)
• Owner – Mahindra Group
• Website – mahindrasatyam.net
INTRODUCTION
• Satyam Computer Services Limited was founded in 1987
by Ramalinga Raju.
• Jan 2009 Satyam –one of the leading IT company in India into the
limelight for the wrong reasons .B Ramalinga raju, The man behind
satyam‘s success proved to be the man behind sat yam's doom.
• In April 2009, tech Mahindra ,(Joint venture b/w British telecom
and Mahindra & Mahindra Ltd.)
• After that satyam computers service ltd. was renamed Mahindra
satyam .
• On 23 june 2009 Mr. CP Gurnani was appointed as the CEO of
mahindra satyam
Cont..
Satyam ,after being taken over by TechMahindra
,has adopted a innovative scheme –VPP (virtual pool
program )- to address the problem of surplus
workforce .
VVP has seen as an indirect way of laying off people.
CASE ANLYSIS
 IN dec.1,2008 report from the National Bureau of Economic
Research stated that the U.S. has been in a recession since
December 2007 .
As the crisis spread like fire and form a global financial crisis,
plunging the entire world into recession.
 Many company collapsed, suffered revenue losses, and co. need
not surplus work.
 Today each company directly or indirectly associated with US
companies.
 Indian IT industry hit by the global crisis which lead to employee
layoff as cost cutting measure.
 A financial scam happened in satyam IT co. by its founder and
formal chairman Ramalinga raju.
 Satyam co. Suffered revenue losses and a cash
crisis ensued.
 In April 2009,Tech Mahindra bought a
controlling stake of satyam company.
 After the takeover, there were speculations of
massive layoffs.
 Satyam(under Tech Mahindra) launched the
virtual pool program(VPP),
 According to VPP terminating excess human
resources as an innovative scheme to cut costs
while retaining talent.
Brief about case
• Due to economic crisis Indian IT companies face
financial crisis and great downfall in their business.
But for Satyam situation is more critical and future of
the company hang in dilemma.
• To overcome this situation Tech Mahindra brought a
controlling stake in the organization and declared that
it had to solve the problem of surplus workforce at
Satyam.
• VVP has seen as an indirect way of laying off people.
VIRTUAL POOL PROGRAM

The Virtual Pool Program is a unique way of retaining and


developing the associates, Them further through training
while ensuring the financial capacity of organization.
After acquiring Satyam Computer Services Ltd. its
become a challenging task for Tech Mahindra to retain
talent in organization. The main aim of VPP is to
addressing staff cost while retaining talent within the
company.
Through this HR practices Tech Mahindra saved cost and
resolved the issue of excess manpower.
Satyam virtual pool program
• It is one time exercise
• It is applicable to satyam associates based in India
• 7000 to10000 of satyam associates were expected to be put in
virtual pool program
• The VPP program has been designed to cover associates who have
not been in billable roles for 3 months or more and include support
recourses.
• Associates in the vpp get reduced pay ,ie, basic pay which is
around 35%to 40% of the total salary, provident fund and medical
insurance
• Senior associates have been put in the vpp for 4 months and junior
associates for 6 months
Cont….
• They are kept in a reserve pool for a defined period, depending
on the position of the associates in the company

• They will be able to access satyam online learning and skill


enhancement programs, they will be assisted by the way of
financial and career guidance and counseling .

• On the basis of individual status of the associates they could


also available the outplacement support being provided by
satyam through its tie up with placement companies.
• They use the vpp period for fulfilling personal aspirations and
hobbies ,contributing to the society, taking up faculty roles, etc.
Affect
•  Satyam employees, about 400 people who were asked to sit
on the virtual bench have been called back into the company.
• In vpp an employee is paid 40 per cent of the salary and
retained on job. The move is aimed at cutting staff costs,
while retaining talent.
• In vpp scheme an associates who was earlier taking home an
amount of Rs.60,000 will be taken home only
15k to 20 k
• Vpp is an innovative way of laying off people where in the
associates are not thrown out of the company but are forced
to exit voluntarily
CONCLUSION
At the time of business declining , the balance
between demand and supply of workforce has
been disturbed and the it companies no longer
need surplus of employees . At that time
. Through this HR practices Tech Mahindra saved
cost and resolved the issue of man power. by his
virtual pool program, be called as the right way
of talent management during a downturn .

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