Oracle India attempts to cut wage bill with hour-based payments: Report

06 January 2009

Software giant Oracle, in India, is reported to have started the practice of linking payments to its 20,000 employees with the number of productive hours they spend in the office.

A report in the Business Standard said that the move has resulted in salary cuts for the company, ranging between 10 and 50 per cent across the board.

As a practice, the software industry bills its employees to the client as a "billable resource", based on the number of hours the employee is engaged in tasks that result in working for the client. If an employee is not assigned to any project, and is instead working on an internal project or is on the "bench", his salary comes from the company's kitty.

By this token, the report suggests that if an employee is billable for 15 days a month, he will be paid in full for that period, and for the remaining he would be paid a "nominal" amount. The report said that the company did not provide any response to an emailed query, except for declining to comment on "speculation or rumours."

The report also said that Oracle India has asked all non-billable employees to engage themselves in internal projects, failing which they can choose to explore "external opportunities". The report said that this programme was initially implemented for the employees of Oracle Financial Services Software, which was earlier known as i-Flex Solutions, and has now chosen to do a country-wide roll out across all its centres, even though it is yet to communicate the decision to its workforce in writing. It said that the company is trying to show this as a temporary phenomenon that is being taken as a step to avoid layoffs, and will see the usual compensation and allowances return once "things start improving".

According to its second quarter results that Oracle announced in December, the company has been able to stay profitable inspite of almost flat revenue growth; its net income fell half a percentage point to $1.27 billion and sales were up 5.5 per cent to $5.6 billion. Oracle's revenues from new software licences, which basically predict future sales, were down three per cent to $1.6 billion.