Satyam pares its salary bill ahead of bidding

In a further effort to cut costs and make the troubled Satyam Computer Services more attractive to potential bidders, its new chief executive officer, A S Murty, has withdrawn the variable pay system for all employees from 1 April, as ''primary costs of the company are people-related.''

In an e-mail addressed to the staff yesterday, Murty said only the minimum guaranteed amount of 25 per cent would be paid towards variable pay for the third quarter (October-December 2008) and the fourth quarter (January-March 2009) to all associates.

While the fixed compensation would continue, a revenue-linked allowance would be introduced from 1 April only for associates working in approved 'billable' roles and who were allocated to billable customer projects.

Murty said maintaining a healthy balance between achieving aggressive goals, retaining talent, and lowering expenses, was the key. Urging the employees of all levels to contribute to the financial restructuring of Satyam, he said job security and job retention were to be given the highest priority in spite of temporary inconveniences.

However, he said cost optimisation efforts should not come in the way of recognising ''extraordinary and exemplary performance''. Expressing gratitude to the staff for taking part in the efforts, he wanted them to explain the rationale for this inevitable measure to their respective families and seek their support and understanding.

Meanwhile, the process to sell Satyam Computer Services is expected to kick off this week. The guidelines for potential investors have been prepared by the government-appointed board and sent to the Company Law Board and Securities Exchange Board of India, according to sources close to the development.