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Polaris asks 100 to quit

Polaris Software Lab, the Chennai-based banking software maker, has asked close to 100 of its employees to take three months’ salary and bid adieu.

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MUMBAI: Polaris Software Lab, the  Chennai-based banking software maker, has asked close to 100 of its employees to take three months’ salary and bid adieu.

Sources say the company has adopted this measure to offset the impact of delays in getting IT projects from its clients.

But a Polaris official denied the pink slips: “We are known to take care of the employees in the best possible way and this information is not true.”

Sources, however, say that most of the 100 employees marked for retrenchment have 3-4 years of experience  and earn about Rs 5 lakh an  annum.

The employees were first asked to appear for 3-4 ‘client’ interviews and then made to take tests on their respective competency areas. They were then told that their technology domain understanding is below expectations and that they were shortlisted for lay off.

Meanwhile, investment bank JPMorgan, which bought Bear Stearns, whose IT infrastructure Polaris manages, has taken charge of some of the IT tasks by utilising its own people to cut costs. This has led to some redundancy at Polaris.

In an April 2008 analyst call, Polaris chairman Arun Jain had admitted to a shortfall in Bear Stearns’ business saying, “..as of now there is small shortfall, but not a significant shortfall, in Bear Stearns business.”

It is also learnt that even IT projects from Polaris’s largest client Citigroup (revenue from US giant accounted for 38.92% of Polaris’ revenue in Q4 2008) are getting delayed, putting pressure on the utilisation of people in the ‘billing’ category. An employee at an IT service provider is put in the billing category after he is recommended by a client to be a part of the IT project.

“Recently the company received some projects from Citibank Singapore, which put to rest a lot of apprehension and anxiety amongst some of the teams at Polaris,” said a source on condition of anonymity.

Sources say the company now wants to fully utilise its bench strength in its existing projects. “Some of the top executives have sent missives to the HR department not to recruit new employees,” the source said.

In the analyst call, Polaris CFO Shrikant informed that the people utilisation rate for the Q4 2007-08 had been 76.55%, 200 basis point higher than the previous quarter. Polaris has 10,093 employees on its payrolls and it faced an attrition rate of 16.05% in Q4. The company has also admitted to adopting demand-sourcing rather than a dedicated hiring plan to wade through the difficult business scenario.

 

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