Oracle India links Salary with Billing Hours [= Salary slash of 10-50%]

Oracle India’s Financial Services (i.e. erstwhile i-Flex), in a drive to cut cost has linked salary with one’s billing hours – resulting in salary cuts of 10-50% across the board.

“If an employee is a billable resource for 15 days a month, he will be paid in full for that period while for the rest of the period, he is paid a “nominal” amount.
The company is also understood to have asked all non-billable employees (those on the bench) to get themselves engaged in internal projects, failing which they can explore opportunities outside the company.” – BS

To add some context, i-Flex’s business is largely dependent on financial sector and is surely facing the heat in the current downturn. Oracle is known to be a good acquisition master (none of their acquisitions have failed so far) – so instead of laying off i-Flex employees (will be looked upon as M&A failure), Oracle has resorted to salary cuts (i.e. force employees to quit).

Do you think a company resorting to such action is acceptable? Is it better to layoff non-billable employees and not cane the billable ones?

What’s your opinion on this saga?

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