Cost-cutting measures in companies have some unforeseen ramifications at home.
With global economy on the cusp of a slowdown, software companies have launched across the board cost-cutting initiatives. What are the ramifications?
Lately the missus has become very agitated about the happenings in the world. Even the Obama victory couldn’t bring the desired respite. For the ‘happy go lucky person’ that she usually is, her current metamorphosis into a cynic is quite startling. The worrisome thing is that I am the one facing the heat of madam’s new avatar, when the real one to blame is the economy.
Before I give you a closer perspective of the issue raging in my home, it is essential for you to know that the missus works for a leading software firm. It all began with a benign videoconference, by the CEO of the company, on a pleasant November morning that was mandatory for all employees to attend. The agenda for the conference was “Special Initiatives for the Quarter”. Extrapolating from the vague subject of the conference, my wife conveniently decided to skip it and focus on shopping for new curtains instead. When she turned up at the office later that day (that would mean around 1:00 p.m — she has flexi hours you see) she was in for a surprise and an unpleasant one at that. Apparently the conference was all about ‘rightsizing’ (a euphemism for ‘downsizing’) and the importance of saving a penny (for the company). To put it crudely, the CEO’s message was: “we are going to do whatever it takes to cut costs (minimum 20 per cent) in order to maintain profitability amid the expected slowdown in business”. The best part was that he had compared his company’s initiatives to those of the competitors and projected his list to be most employee-friendly.
Following is an extract of the minutes of the meeting (as taken down by a colleague of the missus) that outlines the MD’s multi-pronged cost saving strategy (with my comments inserted)
• Bench size to be crunched. Proportion of employees on bench to be reduced to 10 per cent, from the existing 20 per cent. Employees who are unable to be gainfully occupied within their vertical or geographical base will have no option but to move to other domains or locations with better prospects. Wonder what happens to the much touted ‘domain knowledge’ of these employees who are suddenly made fungible? What about the employees who cannot be accommodated elsewhere?
• Delivery Managers and Support staff to be consolidated. Anyone with an MBA would know that ‘consolidation’, just like ‘rightsizing’ or ‘rationalisation’, is a synonym for ‘possible layoffs’. Under this proposal, the minimum number of employees to be billed under a Project manager will be increased. This would mean that managers, who get to keep their jobs, can’t refresh their ICICI Direct or Moneycontrol screens as often as they used to (look at the positive side- anyway the shrinking portfolio is causing enough heartburn). Similarly, the average number of employees mapped to a support staff (e.g. HR, Admin) will be increased.
• Flexi Hours to be removed. The company seems to have discovered that this policy (something that was closest to the missus’ heart) unnecessarily encourages staff to come late to the office and hang around well past evening. This lead to extra administration costs in terms of electricity, snacks, transport etc. Now there would officially be only two shifts in the company with the afternoon shift size kept as small as possible. In other words, only those employees whose project demands a late night U.S. conference call will have the luxury of walking into the office at lunch.
• No more air conditioning in cabs. All cabs used for employee pickup and drop (provided for those who work outside the scheduled office hours) to be made non-AC. Ironically, this comes at a time when employees were demanding that the buses (provided for those attending regular office hours) be air-conditioned.
• Mobile CUG plans to be scrapped. I guess if one employee needs to call another; he needs make the call from the office. The logic seems to be: “If you are so enthusiastic to discuss work outside office hours, pay for it”.
• Entertainment and other Support Services to be removed. The Service Desk in the office was a cool feature through which one could make reservations to movies and plays, pay telephone bills etc.. With this gone, it looks like I will be the one running these errands in the future.
• Leave encashment to be cancelled. Not that I know of anyone who was really using this benefit but the hard working souls will have no option but to take a vacation now.
• Snacks, beverages to be charged. Now this is really personal. I mean software professionals thrive on such freebies. It doesn’t take much to pay, but what about the moral obligation to encourage hard work and coffee counter gossip?
End of minutes extract
The worst thing to happen after a CEO has proposed such sweeping changes and set targets for cost cutting, is that the senior managers come up with their own ‘out-of-the box’ pet schemes, wanting to exceed the target and earn a special crown of honour from the big boss.
Over the last two weeks, the missus and her colleagues have already noticed signs of this. Here’s some of the evidence:
• The hand towels in the rest room have disappeared. So have the paper tissues.
• The lighting in the building has reduced significantly, especially in the lobbies and corridors. On further inspection, it is evident that only alternate bulbs are lit; the others have been removed.
• The printer runs out of paper multiple times in a day. When requesting for extra paper, one comes to know that there is a limit of 30 pages per person per day. Anything more needs special approval from the Admin (stationery) department.
• The thermostat setting for the central air-conditioning is up a few notches, leading to intermittent sweaty spells.
As can be expected, these surreptitious initiatives have added fuel to the fire (in this case cost cutting) and the missus is up in arms against her company, the IT industry and me.
Why me? Well, two reasons. One, I happened to disclose to her that her company lost an entire quarter’s profit through forex losses (by the way, so have many other IT companies who loaded up on exotic derivatives in the race to hedge against the dollar). Two, as a small shareholder in her company, I said, “May be after all this cost cutting I would be able to recover my cost of investment”.
Now she has counted me as her enemy in this matter. Her logic is simple: employees should come first, profit and shareholders second. Her opinion is that, in the race to increase profits, IT companies are compromising on the services offered to employees. She asks, “Haven’t IT firms and their shareholders earned enough profit over the last decade to weather a slowdown, without lynching employees and their benefits?” Given the recent developments within the IT industry, she feels that the only way for the employees to get some rights is though the formation of a “Union”.
My rebuttal is if the same protectionist attitude prevailed in the U.S. or Europe, there would be no outsourcing in the first place. And, so the verbal duel continues…. We welcome your comments to help settle our dispute.
6 months ago