Satyam to downsize its workforce by a whopping 4,500 employees.

After delayed appraisals and cut in payouts, India's fourth largest IT service provider, Satyam Computer is reported to downsize its workforce by a whopping 4,500 employees. This translates to a little less than 9 per cent of the 51,000 employees that the company employs.

Company sources reveal that 1,500 employees have been put under the performance improvement plan (PIP), euphemism for employees put on watch list and asked to shape up or ship out. Apart from this, 3,000 others have not been given any increment in the last appraisal cycle, thereby indicating that their services are dispensable.

Last Friday, company’s chief Ramalinga Raju had sent out an email to all employees warning them, especially the ones on the bench, to not bunk office and be in their best dress code, failing which they may face strict disciplinary action.

The company is reported to have handed pink slips to about 400 engineers and associates in Hyderabad, Pune and Visakhapatnam centers. The company management reportedly asked some of the employees to move out of its rolls to a contractual agreement or leave.

Like its peers, Satyam too claims that the layoffs are a part of its appraisal system. Global head, human resources, SV Krishnan says, "Our experience has shown that around half of them exit the system either voluntarily or involuntarily. We have concluded our appraisal process some weeks back, and we believe we are witnessing similar trends like those in the past."

There were also reports that the company has deferred the joining date of 7500 graduates it had recruited from various college campuses this year. However, the company said that it has no intension of withdrawing these offers. Interestingly, the company has recently announced plans to hire 15000 this year.