Cost cutting is the order of the year

Gone are the days which were full of news related to outsourcing, mergers and acquisitions, take overs of indian companies abroad.We heard about TATA-CORUS deal,TATA-JAGUAR,TCS-CITI group deal of $500 millions. Now the deals are in a doubtful stage.The management of these companies dont know how to sustain the profitability in these deals due to the financial meltdown globally.Problem with citi group financial losses stands at $25 billions till date which raised the eyebrows of TCS buyout of CITI's BPO business which is worth $500 millions, the largest in the indian IT market deals till date.

The financial crisis has forced companies to cut costs on their various expenses such as salary and perks, travel related expenses etc.Similarly it has affected all expansion plans for the firms across globe with the postponing of various mergers and take over plans.The major factor is finance and the long term sustainance for which the firms are struggling now.

The heat is flowing through various modes e.g firms like kirloskar brothers is cutting costs on its travel expenses like not using luxury taxies instead using tata indica on emergency.

The TATA YAZAKI plans not to use electricity after 6 pm in the office premises.
For BHARAT FORGE, only GM's and VP's can avail air travel in economy class.

This is what is happening in india based MNC's.Companies now have been careful about their cost.They didnt care anything when there is a boom for their products and services across the globe but now feeling the heat of not taking care of their finances earlier and suffering.

Cash has been the key and king now a days.Companies who saved their cash profits instead investing hugely on recruitments, expansions and mergers etc are in safe heaven.

Hence we all should remember that bad times comes and it wipes out everything in a click of a mouse, but the long term players with a broad vision sustains in the market place.

The morale of the story is "Save for the rainy day" which applies to individuals and companies across globe too.