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Forced leave: Is your company in IT

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Old 12-17-2008, 12:27 PM
supercool supercool is offline
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Default Forced leave: Is your company in IT


The present economic crisis has made it imperative for the beleaguered tech industry to save costs. To tide over the crisis, IT companies are cutting all corners.

While many have resorted to pink slips, there are also few who are resorting to less painful measures such as salary cuts, reduction in perks and hiring freeze.

Another such measure is `forced leave or sabbatical'. In a bid to beat the slowdown pains some IT companies have extended holidays, or have sent employees on compulsory leaves without pay to cut down their expenses.

Indian IT giant Infosys is among the companies giving its employees this option. Nor surprisingly, this Indian IT bellwether is not the only company offering its employees this option, there are many more.

Here's listing some of the tech biggies who are following the Holiday Saving programme (incidentally, many companies had followed the measure during the 2000-01 downturn as well).


India's fourth-largest services exporter Satyam Computer Services too is reportedly planning to send employees on a sabbatical, but will take a final decision depending on the third-quarter results.

According to SV Krishnan, global head (HR), Satyam is looking at various options to reduce costs and sabbatical is one such option. We will be able to shift our employees to take up social activities relating to our own corporate social responsibility programmes. Employees can also look at working with NGOs during the time of sabbatical. But, they will have to compromise on their salary during sabbatical as the pay structure will be lower than what they are currently drawing.

He added that if the third quarter result is in line with expectations, the company may not adopt any drastic cost-cutting measures.

Satyam has already scaled down its hiring projections for the current fiscal to around 8,000-10,000 compared to 15,000 that it had earlier projected.


Like Satyam, Infosys too recently issued letters to its employees asking them to opt for a one-year sabbatical and engage themselves in philanthropic activities.

The company said that the employees would continue to draw 50 per cent of their salary during the sabbatical.

Though the company claimed that the option is entirely voluntary for employees, it accepted that such belt-tightening measures will help cushion the impact of the global economic meltdown.

Nasdaq-listed Infosys followed its peers TCS and Wipro and announced that it will offer single-digit salary hikes next financial year in order to cope with a lower demand for their services in the US and Europe.


Computer maker Dell Inc has asked employees to consider taking up to five days of unpaid vacation as it struggles to cut costs in the face of weak global environment.

The No 2 computer maker, which announced 8,900 job cuts, is also offering voluntary severance packages and has instituted a global hiring freeze.

According to company's Chief Executive Michael Dell, the move will encourage companies to ride out financial turbulence by focusing on hard returns, rethinking businesses and investing.

Company's spokesman Jess Blackburn said that Dell is asking employees on a voluntary basis to consider taking off (up to) five days ...as unpaid time off as a flexible way to reduce costs for the company.

He added that Dell aims to cut operating expenses in its fourth quarter as its intent is to prepare itself for long-term competitiveness.


World’s largest personal-computer maker, Hewlett-Packard Co, which recently announced salary freeze and cut in travel costs, has notified employees that it will extend its planned one-week holiday shutdown by an additional week as a cost-cutting measure.

However, the company said the majority of employees will be paid during their time off.

Faced by tough economic climate, the company had earlier announced that it would lay off 24,600 employees following its acquisition of Electronic Data Systems.

Company's spokesperson said that shutting down during a period when many employees traditionally take vacation will help HP achieve operational savings and allows employees to enjoy more time with their family.


Apple which dominated the year 2008 with its hottest launches is back in news but for not-so-pleasing reasons. The company is giving its employees eight days of paid leave starting December 24 in a bid to cut down its operating expenditure.

The company's spokesperson said Apple is offering paid leave between December 24 and January 2 to all its employees.

The company which launched its iconic device 3G iPhone in India failed to create a buzz following higher pricing. According to a few media reports, Apple has been able to sell no more than 12,000 iPhones in the country as against an inventory of 50,000 that its two resellers in India -- Bharti Airtel and Vodafone Essar -- had piled up here. Apple has not disclosed how many units have been sold in India ever since its launch.


One of Silicon Valley's largest technology company, Adobe too plans to remain shut over the December holidays to save on operating costs.

Adobe has asked workers to use vacation days to augment the paid holiday days they receive for Christmas and New Year's Day.

The company which plans to cut 8 per cent of its workforce lowered its revenue outlook due to the weak global economy. Company's chief executive, Shantanu Narayen, said that the global economic crisis significantly impacted its revenue during the fourth quarter.


German software company SAP too reportedly plans to send employees on leave between Christmas and New Year as part of a cost savings programme.

In an email sent to all it employees in October, "What our management is proposing is a mandatory, company wide `vacation' period over the Christmas holidays. However, this proposal is still being discussed with our employee representatives with the goal to reach a joint understanding. It is imperative for us to strongly restate here what is already clear to all employees internally. The intention is an "extended holiday" as part of employee’s regular "paid" time-off between Christmas and New Year. This mandatory vacation would certainly not be 'without pay'.

The enterprise software company, which also has instituted a hiring freeze, is cancelling travel and cutting third-party expenses, such as consultants, external training and recruitment. Paradoxically, company has also issued a freeze on internal IT spending.
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