According to India Times: “IT-BPO industry association Nasscom on Wednesday said software and service exports will grow 16-17% in 2008-09 to $47 billion, lower than earlier estimates of $50 billion as the global economic slowdown dampened demand.
The association had also estimated total IT-BPO revenues to grow 21-24% in the current fiscal. As per revised estimates, the total IT soft-ware and services revenues, including domestic revenues, are poised to grow 15.3% in FY09 to $60 billion. The total IT- BPO industry, including hardware, will be worth $71.7 billion in FY09.”
According to IndiaTimes: “CHENNAI: The last quarter has seen IT service providers facing requests from clients to restructure their relationship contracts as well as statement of work. Some clients have sought a discount in pricing in return for assurance of projects for a given time period. A recent report from Zinnov management consulting has indicated that tier II vendors have had to offer 25% discount on pricing to obtain commitment from their clients through the year 2009.”
The Union of Information Technology Enabled Services (UNITES) Professionals, India anticipates at least 50,000 job losses in the first half of the new year, owing to the global recession.
UNITES general secretary, Karthik Shekhar, a computer engineer, formerly with International Business Machines (IBM), says the prediction of another 50,000 job losses has been estimated from the uncertainty of U.S. president-elect Barack Obama’s new policy on outsourcing, the bail packages by the British government and financial institutions which may result in conditions being imposed on local jobs.
[I]ndustry’s economic links to the U.S. and Britain’s recessions have played havoc on the local scene, with at least 10,000 jobs in the industry being lost between September 2008 and December 2008. Others, mostly junior level executives, have taken salary cuts ranging from 25 percent to as high as 75 percent.
According to Bloomberg: “Satyam Computer Services Ltd. chairman Ramalinga Raju and his brother Rama were arrested and the remaining directors of the software exporter sacked, as India started investigating an alleged $1 billion fraud.”
“Satyam, India’s fourth-largest software exporter, plunged for a second day in Mumbai trading on concern it may run out of money after Raju said he falsified the accounts “for several years.” The scandal, whose scope is being likened to the 2001 bankruptcy of Enron Corp., has shaken confidence in Indian companies and accounting standards.”
“The Satyam case is an aberration,” Prem Chand Gupta, the Corporate Affairs Minister said. “The credibility of the Indian corporate sector in general, and IT sector in particular, should not be allowed to suffer because of this.”, according to BBC
Update (01-10-2009): “The chief financial officer of India’s Satyam Computer Services Ltd. was arrested Saturday, the third person taken into custody in a scandal that began when the company’s chairman admitted inflating profits with “fictitious” assets and non-existent cash.
Company founder B. Ramalinga Raju and his brother, Rama Raju, Satyam’s managing director, were arrested Friday in connection with the scandal. In a letter written to investigators, B. Ramalinga Raju admitted that he and his brother were responsible for cooking the books at Satyam”, according to CNN
Satyam founder B. Ramalinga Raju
Update 2 (01-10-2009): According to Naatmad: “Satyam Computer Services, [..] has said it will take fewer people on board to cut costs due to the unstable global economic environment. The company is planning to hire only 8,000-10,000 people this fiscal as against 15,000 that it had earlier planned to recruit. [..] Around 250 employees were given the pink slip last quarter.”
Update 3 (01-14-2009): According to BusinessStandard (India): Satyam may get full-time directors in a week
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According to Reuters: “European investors remain upbeat about India despite an accounting scandal at IT company Satyam Computer Services (SATY.BO) that sent Indian markets tumbling on Wednesday.
Shares in the IT group fell almost 80 percent after founder and chairman Ramalinga Raju admitted inflating the company’s reported cash and bank balances by over 50 billion rupees ($1 billion).
While shaken by what has been dubbed “India’s Enron”, some investors say they will wait for signs of widespread malfeasance among Indian companies before deciding whether to change their investment policy on India.”
Satyam is the fourth largest of the Indian IT outsourcing firms
Satyam serves more than a third of the Fortune 500 companies
Satyam’s clients include multinationals such as Nestlé, General Motors (GM), and General Electric (GE)
Satyam’s auditor is PricewaterhouseCoopers, who endorsed the company’s accounts
Update: Ramalingam Raju, the chairman of troubled Indian IT outsourcing company Satyam Computer Services, resigned on Jan. 7, 2009, admitting the firm had falsified accounts and assets and inflated its profits over several years.
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