The Hindu : Karnataka / Bangalore News : Fear stalks SAP Labs employees

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Wednesday, Oct 29, 2008
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Karnataka

Karnataka - Bangalore

Fear stalks SAP Labs employees

Deepa Kurup

A number of them are employed under contract category
Company trips and family days have been cancelled

BANGALORE: Anxiety stalks the offices and work rooms of the IT industry, as the crisis in the financial markets in the U.S. finds its echo in India. What is happening in SAP Labs India, a leading software products company in Bangalore, is illustrative of how the crisis is impacting India. Jobs have not been affected yet, but amid rumours of several clients cancelling contracts in the past few weeks, and a string of emails from higher-ups about stringent cost-cutting, employees fear that their jobs may soon be on the line.

An employee of SAP Labs (Bangalore), who spoke to The Hindu in confidence, said the first whiff of the crisis came with an email from SAP Chief Executive Officer Henning Kagermann this month. The email, a copy of which is available with The Hindu, listed a series of cost-cutting measures and announced that the company had frozen all hiring, including all temporary workers, interns and students.

It is the “temporary workers” clause that has employees worried, as a significant number of employees at SAP Labs Bangalore come under the “c-number” category, which essentially means that they are on contract.

“Though the management has been telling us there will be no layoffs, this statement is cause for panic for those of us who are on contract or have been hired through external agencies,” an employee said.

Unofficially, managers have made it clear that contracts which are scheduled to expire are unlikely to be renewed. Besides stating that “all engagement with external recruiters and management consultants” will be discontinued, the email also mentions that “existing contracts that will result in excessive cancellation fees will be reviewed on a case by case basis”. This has created insecurity, the employee explained “for many of us who feel secured by our contracts”.

Cancellation

All events scheduled for this year, including company trips and family days, have been cancelled. The 10th annual day celebrations, scheduled to be held on November 16, has been postponed to the next quarter; travel benefits have been cancelled; and employees are now charged Rs. 800 for previously free shuttle service from its Whitefield campus to home.

Besides this, all international trips (non-business related) have been cancelled. “We are being told repeatedly that there will be no layoffs. However, there is always a chance that if more clients cancel, it may warrant such extreme measures,” said an employee.

Company view

When asked to respond to questions on likely layoffs, a SAP spokesperson told The Hindu (via email) that in the company “steps are being taken to insulate employees from potential external threats in these difficult times”. While the company had taken “prudent steps to ensure cost-efficiency in organisational operations”, SAP had not faced any financial crisis and continues to maintain strong financial records.

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