Tag: Wipro

US newspaper chain offshores IT jobs

surprised-newspaper-readerThe McClatchy Company, which operates a major chain of newspapers in the US, is moving IT work overseas and making 150 IT workers redundant.

The chain owns about 30 newspapers, including The Sacramento Bee, where McClatchy is based; The Fresno Bee, The News & Observer in Raleigh, N.C., The State in Columbia, S.C. and the Miami Herald.

Apparently all the IT work has been outsourced to the Indian outsourcer Wipro.

McClatchy CEO Patrick Talamantes wrote to staff and told them about all the improvements that the Wipro contract would bring. It seemed he had forgotten any news training and buried the story about staff cuts in the bottom. US workers are currently have to train their replacements until August.

The letter said that the company was “pleased to unveil our new IT Transformational Programme, a programme designed to provide improved service to all technology users, accelerated development and delivery of technology solutions and products, variable demand-based technology resources and access to modern and cutting-edge skills and platforms.”


The letter than explains the hiring of Wipro, and how the partnership “will improve technology standards and service levels.”

Talamantes also points out that Wipro has been a repeat recipient of Ethisphere’s ‘World’s Most Ethical Company’ award.

After seven paragraphs, and near the end of the letter, Talamantes lowers the boom:

“As we embark on the implementation phase, there will be a realignment of resources requiring a reduction in McClatchy technology staff. While regrettable, this action is necessary for us to realize the benefits outlined above and help the company achieve its long-term goals. Employees impacted by this realignment will be contacted…,” wrote Talamantes.

Looks like that ‘World’s Most Ethical Company’ award is looking a bit shaky. Particularly as the story is not being picked up by McClatchy-owned newspapers.  McClatchy did report layoffs of similar sizes at other firms.

IBM bags Wipro

IBM logoWipro, a major Indian service and business company, has signed a deal with IBM to use Big Blue’s Bluemix cloud development platform.

Wipro, on its part, said it will train 15,000 of its developers to use Bluemix via an online open course across 58 countries.

Wipro is to use over 100 services in IBM’s public Bluemix catalogue but will also use Bluemix Dedicated. That’s a private cloud version for developers to build apps that access sensitive data.

IBM gets access to Wipro’s global pool of developers to release new Bluemix features.

Wipro believes that the deal it has signed with IBM will give it access to Bluemix that will benefit its customers.

No financial details of the deal were announced.

Indian based IT service providers grow

The top five Indian based IT service providers are continuing to grow.

According to a report by Gartner the companies grew 23.8 percent in 2011, compared to the 7.7 percent of growth for the whole global market.

TCS came out on top with a 2011 market share of 1.1 percent, saw a 2010-2011 growth rate of 29.4 percent and a revenue of $9031 million.

There were some changes at the top – with Cognizant triumphing over Wipro to become the third-largest Indian IT services provider. The company also saw the highest growth rate of 33.3 percent among the top five providers in 2011.

Infosys came in at second place, raking in a 2011 revenue of $6,279.  This contributed to a growth rate of 17.8 percent and a market share of 0.7 percent. However, it hasn’t all been bells and whistles for the company, which has been fraught with allegations of fake visas and low pay.

Last month whistleblower Jay Palmer, who previously worked as an IT consultant for the company, claimed that the service provider smuggled Indian workers into the US. He also claimed that the company had fiddled business visa rules requiring foreign workers to be paid US market rate, and paid them minimal wages.

Earlier this month, the company was dealt a further blow when an anonymous ex worker gave details on how the firm bypassed US visa laws and discriminated against American staff.

However, this hasn’t put companies off using the firm or the competition, with Gartner claiming that the top five service providers have continuously chipped away market share from the large multinational corporation providers.

It said that this was a result of increasingly winning large outsourcing deals, from Fortune 1000 companies, which reached roughly $100 million in the past five years.

Greatly expanding service portfolios and cross selling products such as infrastructure services, business process outsourcing (BPO) services, cloud and analytics services, has also given these companies an edge, Gartner said.

Wipro asset strips Infocrossing

Wipro is about to sell all the data centres and other computer hardware assets of its US subsidiary Infocrossing.

According to the Times of India the move is to unlock value at the outfit’s ‘non-core’ business.

Wipro apparently has had initial offers from several medium to large US telcos. The deal is said to be worth $300-$400 million.

A deep throat in Wipro said the Infocrossing’s data centres were not the “game changer” it wanted over the next three to five years. . Data centres are being considered non-core by outsourcing vendors, but are becoming more important to telecom firms. We guess clouds are for other people.

Wipro said that so far the interest it has had has been unsolicited and there more than one potential bidder.

In August 2007, Wipro wrote a cheque for $600 million for Infocrossing. At the time the outfit only made about $200 million.

At that time, the company had plans to increase Infocrossing revenues five-fold to $1 billion by 2010. However it soon twigged that punters did not make decisions based on whether a vendor owns data centre.

There are some things that Infocrossing has which Wipro still wants and that’s mostly its lucrative healthcare business. Infocrossing has Nestle, BP, Capital One and Best Buy among its top customers. 

Indian outsourcing companies forced into price cuts

After years of seeing a buoyant services market, India’s top players are suffering.

According to the Economic Times, back office and software work is hardest hit, where potential clients want to see prices knocked down by around 15 percent.

American companies are driving the trend with customers such as Walmart, Home Depot, Ericsson and AIG all trimming rates and giving work to competitors, who offer deals better than the big Indian companies.

There is a domino effect on top Indian outsourcers such as Wipro and TCS, which will see their profits fall by around one to three percent this quarter as a result.

The Indian outsourcing market has also been hit by companies moving their operations back to their own countries.

Only last week, Santander decided to fly its call centres away from India. The PR reason given is that there were too many complaints about services

Others will follow suit as prices in India continue to climb.

The price of outsourcing in India has risen for a number of reasons. Firstly, it is to combat the rising costs of staff salaries, which according to Esteban Herrera, chief operations officer of US-based HfS Research, have risen by 10 to 15 percent over the past few years. He added that salaries of engineers with three to six months experience had also risen by 40-50 percent compared to the pre-recession 2008 levels.

Other companies are also adding on “extras” in a bid to recover lower price quotes.

It’s not all doom and gloom if Gartner’s predictions are to be believed. Back in April this year, analysts said that the business process outsourcing (BPO) market in India will continue to boom well into 2014.

The sector, which saw a 28.6 percent increase from 2009 and managed $1.139 billion in 2010, will be driven primarily by increasing volumes in existing BPO engagements, clients expanding the scope of existing BPO relationships, and a number of new BPO deals.

It added that the market will grow by $1.69 billion market by 2012 and increase to $2.47 billion by 2014.

Executives try to flee Wipro

It seems that executives working for IT outsourcing outfit Wipro are dead keen to clear out their desks and collect their P45s.

According to the Times of India,  one in five of its 500 senior executives have either quit or are looking for new jobs since the new CEO took over.

The figures are based on reports from head-hunting and recruitment agencies, who claim that they have their paws on dozens of vertical/domain and business heads at Wipro.

One claims to have received 52 job applications from Wipro employees in the 8-20 years of experience range in the last month.

More than 40 have quit the company in the past few weeks. This adds up to 100 staff members.

Apparently the managers are fairly sure that everything is going to go pear shaped and their jobs might not be there soon.

New CEO, T K Kurien has apparently been seen sharpening an axe and muttering “I’ve got him on a list”, and has been conducting an internal review.

The target appears to be heads. Delivery heads, vertical heads and business units heads so heads are almost certain to roll.

Figures for the galley slaves is likely to stay the same with only small reductions. It seems that unlike many outfits, Wipro is blaming its lackluster performance on its managers.

Apparently this sort of change has not been seen at Wipro before and certainly it is all happening fast, too fast for some managers. 

Indian services industry pulls out of Japan

Given the Japanese radiation crisis deepening at the Fukushima nuclear power plant, Indian IT organisations Infosys, Wipro, HCL Technologies, MindTree, Tata Consultancy Services (TCS) and L&T Infotech are taking no chances as they call back employees from Japan.

Infosys had started the process of bringing back its employees three days ago. It has about 350 employees in couple of offices in Japan, one of them in Tokyo.

Sources close to Infosys said: “Initially, it wasn’t clear if the employees are coming back or not but given the crisis, management has decided to bring back all the employees and started the process of booking tickets.”

Wipro Technologies has offices in Yokohoma and Okinawa. The Indian IT services group has decided to bring back its employees to India and made an arrangement for a chartered flight with Air India.

Saurabh Govil, senior vice president, Wipro HR said: “Wipro is making arrangements for its onsite employees’ travel, including seats on a chartered Air India flight. We will facilitate their working from home or temporarily relocate to safer parts of Japan. Extensive business continuity measures have been put in place so that our customer operations are not impacted.”

HCL Technologies has given an open option to all its employees in Japan – Indian or Non-Indian – to relocate to another location or go on leave. HCL has 400 employees in Japan, Indians making up 50 percent of the total number.

An insider said: “Either the employees may take leave or may also work from China, Singapore or India, but on Japan’s timings.”

MindTree has asked its employees to move their families immediately and will keep a close look on the situation before deciding on bringing back the employees.

L&T Infotech has hired Kingfisher Airlines to operate a special flight on March 17 to bring back its 185 employees and their families back to India.

Wipro opens development centre in Hungary

Wipro Technologies has announced the opening of a new European development centre in Hungary’s capital, Budapest.

The Indian outsourcing company, which has received criticism for its part in UK on-shoring, intends for the European centre to be used primarily for restructuring Magyar Telekom, a Deutsche Telekom subsidiary that Wipro signed a restructuring deal with earlier in 2010.

The move marks a long-term plan by Wipro to bring its services into closer proximity to its customers and to make use of “local powers”. Wipro already has 20 bases in Europe and there are plans to build four additional centres in Romania and Poland.

Hungary’s investment agency, ITD Hungary, welcomed Wipro’s announcement, particularly since it could also attract other Indian firms into Europe and Hungary in particular. 

Competition is one thing, but it has been revealed that a number of Indian tycoons have been lobbying European countries in order to take advantage of the IT industry’s desire to hire a workforce much cheaper than that offered by European citizens.

When we look at some of the lobbyists, it raises further questions. One of them is Nira Radia, who lobbied on behalf of big businessman Ratan Tata, the chairman of India’s largest conglomerate Tata Group. Both Radia and Tata are involved in the 2G spectrum scandal that has rocked India recently, and it was revealed that Radia had been lobbying the former Indian Minister for Telecommunications, A. Raja, for 2G allotment.

While the 2G scam is a separate affair to the  controversial on-shoring, it does raise a number of questions about governments giving in to lobbying, regardless of how tempting the offers might be. It’s not hard to understand why the UK or Hungary would want Indian investment, particularly in the current economic climate – but from what we have seen so far the system can easily be abused.

Infosys, Wipro, TCS want to hire fired ex-employees

Once fired, now eligible to be hired. That’s the case for ex-employees of Indian Business Process Outsourcing (BPO) major player Infosys. Sources close to the Infosys BPO claims that the company management is asking the present employees to refer the experienced ex-employees who were fired during the recession.

A source speaking to TechEye on the condition of anonymity says: “We have been asked to bring our friends to the company which is normal in employee referral programs. But, what is interesting here is we have been asked to bring back the ex-employees who left the company during the recession phase.”

This aggressive hiring strategy is nothing this year as during the end of every year, companies do go for referral hiring. The exception here seems to be the lucrative incentives that human resource management is offering employees for bringing the ex-employees.

During the recession, Indian BPOs including Infosys sent a considerable of employees their pink slips.

Mostly, this practice of offering almost 100 percent increase in referral incentives is practiced by Indian majors. The other companies adopting the same policy are Wipro BPO and Tata Consultancy Services (TCS).

More than 200,000 employees lost jobs during that period which most of the companies rubbished, creating doubt and uncertainty in the minds of many BPO employees in India.

Now, with business getting back on track, these companies are on a hiring spree.

What will be interesting to see is if these companies manage to build the trust that they have lost during the recession by firing the ones who were in need of jobs.

UK India Business Council has "no opinion" on Radia scandal

Earlier this year we posted an expose on the outright dodgy practices of on-shoring in the UK as well as the abuses and tax dodging that companies exploiting an Intra Company Transfer Visa loophole can get away with. 

Last week TechEye had the opportunity to talk to a spokesperson from the UK Indian Business Council at a UK Trade and Investment conference, so we took it. Could it be that every level involved in the UK is fully aware of lobbying from the Indian services industry – mega corporations like Wipro and Tata Group? It’d be hard not to.

As one IT contractor tells TechEye, it “won’t be long before Ratan Tata is knighted”. Tata is embroiled in the ongoing Radia tapes spectrum scandal over in India, which suggests telcos lobbied government officials for a slice of 2g spectrum pie. It’s a real mess, there are more leaked tapes to come. Our Virudh Sen in India writes it up here

How can we trust gigantic services companies with fair-handed deals in the United Kingdom when there’s a storm of mistrust and underhanded deals being exposed in India? What is the opinion of the Radia leaks of the UK India Business Council – which works closely with Tata and friends? Ratan Tata has been to the supreme court attempting to put a gagging order on the conversations – we wonder why.

The chap we asked fell silent and redirected the question to Caroline Erskine, Business Services Manager. The UK Indian Business Council “has no opinion” on the tapes. Er…

And just why was Ratan Tata granted so many audiences with David Cameron? As the Coalition went through, he was one of the very first in business to have a chat with Cameron. The first was in June, then again in July. In October he was included in Cameron’s business adviser’s group. 
In fact, as a contractor tells us, “Tata has a huge amount of access to the senior government people to lobby for his conglomerate’s interests.”

The UKIBC says, simply put, that the reason is because he’s a major investor in the UK. Never mind the continued Intra Company Transfer Visa problems which threaten to continue to pull cash straight from British coffers.

Indian workers brought on shore are not exactly getting an easy ride, either. We’ve heard of workers being seriously underpaid and encouraged to eat out for every meal, claiming back with receipts – this is part of their “salary”.

We have emailed a long list of questions to Erskine but do not expect a response to any. She  offered TechEye an opportunity to “learn more about IT servicing” if we wanted any sort of official line.

ICT Visas were left well alone in the immigration cap. The Economist says this is a rare good thing from the cap, but then it serves Big Business.

In the meantime, it seems at least one Member of Parliament thinks ICT Visas are a cause for concern. The Right Honourable John Redwood MP has put questions to Theresa May. TechEye eagerly awaits a response.