About 31,500 employees of Mahindra Satyam are going to get a hike of 12 per cent (offshore) and 2.5 per cent (onsite) with effect from October 1.
The company, which deferred its hikes to the third quarter, said it had taken opinion of its employees on whether to go for a lower percentage of hike for nine months or higher percentage of hike for six months. “They preferred to take the latter option,” Mr C.P. Gurnani, Chief Executive Officer of Mahindra Satyam, told analysts after announcing the results.
This could have an impact of 250-300 basis points on EBIDTA (Earnings before interest, depreciation, taxes margins and amortisation) in that quarter.
Mr Gurnani also indicated that there could be extra attrition during the appraisals. “We will be expecting a spike. We are planning some extra attrition,” he said.
For the first quarter ended June 30, 2011, the company achieved utilisation rate of 74 per cent, including with trainees. Cost of employees stood at Rs 930 crore (Rs 868 crore) for the quarter in a turnover of Rs 1,434 crore (Rs 1,248 crore).
Subsidiary sale
During the quarter, Satyam Computer Services Belgium sold its entire stake in S&V Management Consultants for about Rs 40 crore (€6 million).