Mascot shuts unit, relocates 60 staff

BANGALORE: Mascot Systems Ltd. said on Tuesday that it was closing its center

in Pune and shifting 60 employees to other units in a bid to cut costs and

consolidate operations.

The Indian subsidiary of US based software firm iGATE Capital Corp said it

would relocate these employees to software development centers in Bangalore and

Madras or to ones outside the country. About 50 per cent of Mascot's 1,600-plus

worldwide staff write software in India while the rest work at clients' sites

abroad.

The unit's closure comes at a time when most Indian software firms are

struggling with slower sales growth in a troubled US economy, their largest

market. But earlier this year, Mascot forecast a 60 per cent surge in profit to

Rs 750 million ($16 million) in the current year starting in April, on a 40 per

cent jump in revenues to Rs 5.0 billion.

Mascot says this growth will come from higher revenues from work done in

India, a cheaper alternative to doing work at clients' sites overseas.

"Mascot's Chennai and Bangalore centers have the capacity required to

achieve the significant growth in offshore business that Mascot is targeting

this fiscal year," the company said in a statement.

In the year to March, Mascot earned about 18 per cent of its revenue from

work done in India, with the rest coming from on-site business. The United

States contributed about 66 per cent of Mascot's revenue of Rs 3.5 billion in

the year to March. Twelve percent came from Europe and the remainder from

Asia-Pacific.

Mascot's shares ended down 4.79 per cent at Rs 90.40 on Tuesday while

Bombay's main 30-share index closed flat.

(C) Reuters Limited 2001.