Category Archives: BPO News

News about what is happening in the BPO industry

Finally an Obama Outsourcing Policy

outsourcingAs was being expected, Barack Obama finally fulfilled his promise of formulating policies that will discourage “Outsourcing”, so that there are more job opportunities in the United States. So what is this policy?

Barack Obama finally initiated a bill that is still pending approval at the US Congress, is aimed at providing tax-cuts to companies that operate within US and imposing higher taxes and removal of tax benefits to US companies that outsource business to countries like that of India. While announcing this President Obama did not forget to make special mention of Bangalore. But is this policy going to work?

The United States of America is already reeling under severe economic recession. Quite a few of its top companies have gone bankrupt already. Will the US want its companies to incur more costs. Because outsourcing is here to stay. The cost-effectiveness that these companies see due to various cost factors in countries like that of India, including low cost labor, is something that they just cannot overlook.

This is what a report in the TOI had to say -

Domestic business process outsourcing (BPO) units providing services to the American companies will not be affected by the proposed

decision of US President Barack Obama to discourage outsourcing by imposing taxes, said global consultancy firm Ernst & young.

“The companies which outsource business to third parties will not be impacted (by the proposed tax move),” said Ernst & Young Tax Director Rajendra Nayak. However, he added, the US companies which outsource services from their own arms including wholly-owned subsidiaries might face the heat of Obama’s tax proposal, which is yet to be approved by the US Congress.

According to the E&Y expert, the captive outsourcing units of Americans will be impacted by the proposal as it would be required to adhere to the regulations of the home country. On the other hand, the domestic Business Process Outsourcing units provide services to companies from different countries, including America, will primarily be governed by Indian laws

and may escape the impact of changes in the US tax laws, Nayak said.

The step, he said, is directed at encouraging the US companies to do business in the US. However, the success of this objective would depend on comparative advantage that locations like India provide over the loss of revenue because of taxes back home in the US, sources in the Central Board of Direct Taxes (CBDT) said. The US companies would stop giving business to their subsidiaries in India only after evaluating if the benefit they have in India based on lower production costs

in the country is higher than the tax to be borne in the US itself, they said.

So if you look at the overall perspective, the impact of this policy on India is negligible. Hence we do not need to worry at this point in time and can be assured that indeed, “Outsourcing is here to stay”.

The Tech Mahindra takeover of Satyam

tech-mahindra-satyamFinally there is some respite for the employees of Satyam. They were hanging in imbalance till about a few weeks back. All of a sudden TechMahindra came in and won a bid for their takeover and breathed fresh and new life into the otherwise dying organization.

What had happened to Satyam? Was it so weak that it would disintegrate, just because one Mr.Raju decided that he had made enough fool of everybody. Satyam is not that weak an organization. When Mr. Raju set up Satyam he gave it a meaningful name, but he couldn’t live upto it. Still he had built a huge organization on the foundation of truth which is why it was able to acquire huge businesses from huge clients. Satyam had a large clientele of over 500 clients -some of them as large as GE, Cisco, Citi and General Motors. This is enough proof that they are indeed a strong organization.

Add to this the strength of TechMahindra and the combined entity had catapulted to the 4th position in the IT firms list just behind HCL technologies. Under the leadership of a visionary like that of Mr. Anand Mahindra, I am sure that the TechMahindra-Satyam combine will do wonders.

All the best to all the employees of the TechMahindra-Satyam team.

The Fate of Nipuna

As Satyam plunged into a deeper crisis with its founder and former chairman, B. Ramalinga Raju confessing to a financial fraud and later being arrested, the fate of thousands of employees at Satyam and its subsidiaries were hanging in imbalance. At this point of crisis there would be nothing more that general advice that anyone could offer these employees. Stay calm and monitor the situation. Things should settle down very soon. The kind of company Satyam was, with its magnitude and presence, there would certainly be a bailout that would happen.

Nipuna is the BPO arm of Satyam and has been in business for some time. It has offered stability and growth to its employees, thanks to the kind of businesses it has been handling. But what is in store for its employees is still a question without answers.

A look at similar instances from the past could give confidence to all of you who are going through this crisis situation. Satyam is a huge company to be dissolved overnight. The most viable option in front of the government and the corporate world is to put Satyam into some kind of acquisition or, takeover process. If that be the case then there is a bright future for all the employees.

So my advice like anybody else’s, at this point would be to remain calm and watch the proceedings. Have confidence in yourself. Your experience of all these years is more than enough to get you a job of your choice if you decide to change jobs tomorrow. So why go for an inferior option today, thus destroying your careers. Let the tide get over and you would see better days.

All the best to all of you.

Satyam BPO recruiting

Finally there is something for the employees of Satyam BPO to rejoice about. Satyam BPO (formerly Nipuna) is recruiting people for its latest business.

As per the latest news, Satyam BPO has finally closed a deal that was in the pipeline for some time and consequently required about 5- additional heads. Hence they have started recruiting for this business that they have just bagged.

“We are recruiting as per requirement for a particular new business which we have bagged recently,” confirmed Manjula Manjotra, head of Global Marketing and Communications (GM&C), Satyam BPO Limited.

“According to the requirements of a client, who has given a new business order, a batch of freshers have been recruited by the company. The brand Satyam perhaps still sells. None of our clients have backed out,” a senior employee of Satyam BPO said.

In the midst of the crisis that Satyam was going through, the employees were staring an uncertain future. In one of my previous blog, I had mentioned that the employees of Satyam BPO should remain calm untill the tide is over. Now that Satyam BPO is recruiting, they should be fine and should look forward to their career growth.

There are also talks of the BPO arm of Satyam being up for sale and reportedly, Essar Group’s outsourcing firm Aegis BPO is on the verge of approaching Satyam Computers for a possible buyout of its BPO operations. If this happens, then employees of the company would have more reasons to rejoice.

The Road Ahead – BPOs projection for 2009

After quite some time there was encouraging news for the aspirants of a BPO. There was a lot news floating around in the media that there would be quite a few job cuts in the first quarter of 2009 and that the BPO industry’s growth will experience a slow down etc. But the below report from, "The Times of India", quoting the NASSCOM, has something else to say.

{Software and BPO industry body Nasscom on Wednesday said the business process outsourcing (BPO) sector is not in the danger of losing jobs due to the ongoing economic downturn rather a net hirer in the current fiscal. In a statement Nasscom said,
"Media reports suggest that the Indian BPO industry will see 2.5 lakh job losses by the first quarter of 2009, in the wake of downturn in the US and other developed economies. Nasscom’s research and interaction with its member companies is not in support of this statement."
Our detailed industry performance and forecast for FY’09 will be released in the next fortnight. However, on employment the industry will continue to be a net hirer in FY’09 as a direct corollary of industry growth and fears of large scale job losses at an industry level are unfounded." The industry body’s comment comes in the wake BPO Industry Association president Samir Chopra stating that "severe job loss is expected because of recession. We are going to request for a fiscal package from the government, but if that doesn’t happen, then there be huge amount of losses in terms of manpower. I think a quarter of a million jobs will go." The $11-billion BPO sector employs about seven lakh people.}

So now that should be encouraging for everyone, I believe.

Read the entire report here –