Satyam slashes costs to strengthen acquisition chances

Indian outsourcer Satyam Computer Services will implement a range of costs-cutting measures to survive the global recession

Indian outsourcer Satyam Computer Services will implement a range of cost-cutting measures to survive the global recession, the company said Thursday.

Satyam will freeze capital expenses, ban business-class air travel by employees and require staff to stay in guest houses owned by the company rather than hotels in certain areas.

Two senior employees of the company have also resigned, and more trimming of senior management is likely soon, a spokeswoman for the company said.

The moves are in part intended to make the company more attractive for a potential acquisition, according to a source inside the company.

The company's founder, B. Ramalinga Raju, plunged the company into a crisis in January, after he said the company's profits had been overstated for several years.

An immediate concern at Satyam was to find working capital, which the company's new government-appointed board said it has obtained through bank loans.

In an e-mail to employees, which has also been circulated to reporters, the company's new CEO, A.S. Murty, said the company faces challenges with the global economic slowdown as it attempts a financial recovery.

The company is starting to receive new orders from customers and should be able to eventually compensate for the ones it has lost so far, Murty said.