Two global biggies log out of IT City

Two global biggies log out of IT City

Intel abandons Whitefield
The Times of India

Bangalore: India’s ambitions of emerging a global chip design and development hub has just suffered a big knock. Intel has killed its muchhyped Whitefield chip, a multicrore Xeon processor for servers with four or more processors that drew its name from Bangalore’s IT hotspot, Whitefield, and which was being developed almost wholly in this city.

Sources in Intel say the enterprise server platform, code-named New Town, also under development in India and which was to use the Whitefield processor, has perhaps been canned too “since no work on this has happened for over a month”.

Intel had invested heavily in the project, both in infrastructure and people, drawing in some of the brightest talents. Some 600 people are said to be employed in the core hardware part of the project.

Intel said the Whitefield chip is being replaced by a new processor code-named Tigerton, under development in Israel. A part of the Whitefield team is expected to be used for testing and validation of certain server platforms. An Intel spokesperson said there will be no downsizing. “We will only be ramping up in India. There are always new projects emerging that people can be redeployed into,” she said.


Did Intel’s audit process undermine Whitefield?

Bangalore: It is not quite clear why Intel was compelled to nix the Whitefield chip project. Intel has said the change to the Xeon plan came as engineers found ways to produce a better processor by 2007. But Intel employees attribute Whitefield’s failure at least partly to Intel India’s audit process of allowance claims over the past several months, which is said to have demotivated the Whitefield team. TOI had reported last month that many Intel employees have been going through a difficult audit process of claims for LTA, drivers’ allowance and HRA, resulting in the exit of some 250 employees. Employees say high-end work like Whitefield requires huge amounts of motivation which the audit process undermined.

It is also said that Srinivas Raman, Intel’s former director of desktop & enterprise group and the man driving Whitefield, quit Intel in July, partly disappointed with the manner in which the audit process was being conducted. The Intel spokesperson, however, said that “issues related to personnel matters are totally disconnected” from the Whitefield cancellation.

For Intel, the Whitefield episode is a further setback in its head-to-head fight against Advanced Micro Devices (AMD), which in recent times is seen to have had an edge in developing superior processors.

J P Morgan Securities analyst Christopher Danely has been quoted as saying that Intel’s cancellation of the Whitefield processor “was the most significant negative product announcement since it was targeted at the lucrative four-way and up (four or more processors per system) server end market.” Danely goes on: “We are concerned as we believe this segment represents roughly half of the $4 billion available market for server processors and has above-average gross margins.”

Confession confusion

Intel India has set October 28 as the last date for employees who have faked bills to claim allowances to give written confessions to this effect. The company has assured employees that those who confess will be let off with what Intel calls a permanent written warning (as against a temporary warning which could be withdrawn from the records under certain circumstances). The company has said a confession will not affect performance appraisal or increments.

Nonetheless, there is enormous confusion among employees on whether to confess, considering what it could mean in terms of answering to income tax authorities, paying evaded taxes for past several years and paying penalties. Following TOI’s reports on the matter, IT authorities are said to be pushing Intel to come clean on the entire issue. At employee meetings, the new Intel India president Frank Jones is said to be conveying the message: “If you confess, you will save your job, and the IT authorities may audit you. If you don’t confess, you get fired, and the IT authorities may still audit you.”


Bank moves 1,000 jobs to UK

Bangalore: A big BPO account is being moved out of IT City. UKbased Abbey National, a financial institution that has been outsourcing to India through Bangalore-based M-Source, is moving the job back to its captive call centres in Milton Keynes, Teesside and Glasgow. M-Source has over 100 dedicated seats for the client, sources said.

When contacted, MphasiS chairman, Jerry Rao said: “No comments.’’

However, according to a report in a section of the international media, the bank is bringing 1,000 jobs back to Britain. It also said that: “Abbey’s retreat from India was prompted by complaints from customers.’’

The unit in Bangalore carries out basic bank accounting tasks, such as reading out customers’ balances over the phone and drawing up standing orders, said the article. However, customers were unhappy with the service; some even complained of language difficulties.

An Abbey insider was quoted in the report as saying: “Given the risk to our reputation of moving the jobs offshore, you want the service to be top-notch. If it isn’t top-notch, then why are you there?’’