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MphasiS to hire only 6k this year

Views 1 Views    Comments 0 Comments    Share Share    Posted 03-12-2008  
New Delhi: IT services firm MphasiS will hire 6,000 people this year, about 2,200 less than anticipated, due to improvement in employee
productivity, its chief executive said.

The Bangalore-based firm, majority-owned by EDS which merged with Hewlett-Packard (HP) early this year, improved its utilisation rates by 11% to 80% in the past seven months, CEO Jeya Kumar said. Utilisation — percentage of hours spent on billable projects versus the total number of hours worked — had slipped in the past one year, as some clients postponed projects a few quarters ago.

The company claimed that building up of extra capacity was another reason for decline in productivity. Utilisation rates don’t take into account employees on the bench — the buffer for new projects — and in training. IT-ITES companies usually keep their utilisation rates around 75-80%.

MphasiS has already hired 2,500 people so far and will hire another 3,500 by March 2009. It recently changed its fiscal year to November-October to align it with HP’s. At the end of seven months (ended October 2008), it had about 28,795 employees.

“Our focus during the past 6-7 months has been on driving internal efficiencies and improving our geographical presence,” Mr Kumar said. MphasiS is now investing in expansion in Europe, Australia and New Zealand.

Mr Kumar said the move to hire less was not linked to the slowdown. “We’re not seeing any downturn yet. Customers are taking longer to decide and the process is much more complex, but projects are not getting cancelled,” he said. MphasiS is targeting bigger outsourcing deals following consolidation in the global financial services space.

The company has decided to focus on fixed-price contracts, as opposed to time-and-material contracts, to boost operating margins. Expansion in domestic BPO business would largely happen in tier II and III cities.

MphasiS has also initiated discussions with HP on tapping synergies. “We have started discussions on a joint go-to-market strategy. There is no overlap between the two.

Our infrastructure technology outsourcing (ITO) business, in particular, can gain a lot from the association with HP,” Mr Kumar said. However, concrete plans on that front would emerge in another quarter.

MphasiS reported consolidated revenues of Rs 1,907 crore in the seven-month period ended October 2008, up 41% growth over the same period last year. During the same period, net profit stood at Rs 295 crore.

Source:
http://economictimes.indiatimes.com/News/News_By_Industry/Jobs/MphasiS_to_hire_o
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