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Adith Charlie

Mumbai, Aug. 27 The slowdown in the US auto industry has prompted product life cycle management and engineering services firm Geometric Ltd to cut down on the number of people employed in its engineering practice in the US.

Instead, the Godrej-promoted company will increase offshoring to low cost destinations such as India, China and Romania.

About 80 people employed at centres in Detroit and Illinois (both in US) by its engineering subsidiary- Modern Engineering (acquired by Geometric in late 2006) - have been laid off since last year,

Geometric`s Chief Financial Officer, Mr G Ravishankar, told Business Line. This has brought down Geometric’s engineering-related headcount in the US to 380 from 450. (Modern Engineering was rechristened as Geometric Engineering before being folded into the city-based company’s US operations)

Explaining the rationale, Mr Ravishankar said: “When we had acquired Modern, the strategy was to retain every employee in Detroit and still offshore incremental volume. However, due to the slowdown it has become imperative to increase offshoring so that we may be able to maintain profitability. Hence we had to lay off some employees in Detroit and scale up hiring in our offshore centres.” Moreover, customers too are in favour of more offshoring to cut costs.

Mr Ravishankar feels that there is more room for rationalising Geometric’s engineering employee base in the US, especially with the sluggishness in the Detroit market expected to continue in the next couple of quarters.

Geometric is now looking at increasing its offshore component of revenues to 15 per cent of overall revenues by the end of this fiscal from six per cent as of last quarter, he added.

"We will continue with our strategy of increasing hiring in our offshore destinations," he said, further reiterating that the company would employ 6000 employees by 2010, as against 3000 as of now.

As off shoring picks up, Geometric would also setup another low cost centre in Eastern Europe by the end of this fiscal.

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