HRM / OB Case Study

Mahindra Satyam’s Virtual Pool Program (VPP): Managing Talent in a Downturn?

OR

Abstract:
Triggered by subprime mortgage crisis, US Financial Crisis (2008) resulted in engulfing world economy with sudden downfall in all the major economic indicators leading to unprecedented layoffs. Amidst these layoffs, Satyam Computer Services Ltd. was hit by an internal financial scam, aggravating its situation more than any other Indian IT company. As the future of the company hung in a dilemma, Tech Mahindra bought a controlling stake in the organisation and declared that it had to solve the problem of surplus workforce at Satyam which ranged between 7,000-10,000 associates. Amidst speculations of massive job losses, the company announced an innovative scheme – the Virtual Pool Program (VPP) – to address the issue of surplus workforce while at the same time retaining talent. However, can VPP be called as an effective talent management strategy amidst downturn? VPP has also been called as an indirect way of laying-off people.

Pedagogical Objectives:

• To discuss and analyse the background and efficiency of Mahindra Satyam’s VPP
• To analyse VPP as a talent management strategy amidst downturn
• To debate on the impact of VPP on Mahindra Satyam’s associates in general and the resulting effects on Indian IT job market.

Keywords : Talent Management; Employee Retention Strategies; Layoffs; Severance Packages; Employee Morale and Layoffs; Virtual Pool Program; Temporary Layoffs; Satyam Computers; Mahindra Satyam; Layoffs in a Downturn; Downturn and Downsizing; Managing Downturn without Downsizing

Contents:

• Global Economic Meltdown and Indian IT Sector’s Repercussions
• VPP – Innovative Laying off?
• Satyam's Virtual Pool Program (VPP) – Key Features
• Repercussions of VPP