Satyam shares drop on job cuts

BANGALORE: Satyam Computer Services Ltd, India's fourth-largest software services provider, was poised for its biggest drop in five years after a report that the company may fire about 9 per cent of its employees.

Satyam, which fell as much as 12.8 per cent in Mumbai trading, the most since April 2003, was 9 per cent down at Rs 371.5 at 11:16 am. Satyam led a decline in technology stocks on concerns that the deepening credit crisis in the US will force clients to cut back on orders further.

Hyderabad-based Satyam and larger rivals Tata Consultancy Services Ltd and Infosys Technologies Ltd in July reported first-quarter profit growth slowed as Wall Street clients reduced orders and delayed new contracts. Since then, the deepening crisis has forced the US Treasury to take over mortgage lenders Fannie Mae and Freddie Mac and losses and writedowns at financial firms have crossed $500 billion.

Lehman Brothers Holdings Inc, once the fourth-largest US investment bank, intends to file for bankruptcy after Barclays Plc and Bank of America Corp abandoned talks to buy the crippled firm.

Bank of America plans to acquire Merrill Lynch & Co, the world's biggest brokerage firm, for about $50 billion.

Satyam may cut as many as 4,500 jobs, the Economic Times reported today, citing unidentified people.

As part of its appraisal process, Satyam identifies “around 5 percent” of its employees for “performance improvement,” the company said in an emailed statement. About half of them leave “either voluntarily or involuntarily,” Satyam said, adding the company had completed its latest appraisal a few weeks ago.

source : times of india