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[achutank]

WN actually you are the best guy to talk about this since you set up BOPs in India. mass layoffs are not a done thing in INdia unless in special cases of company going down the hole. but employee reduction for cost-cutting as per the ups and downs of business is a relatively new phenomenon.

what do you guys in the outsourcing industry think - ravi, CP etc.

Vertex sacks 300 employees

http://infotech.indiatimes.com/News/Vertex_sacks_300_employees_/articleshow/3419921.cms

UK-headquartered BPO firm Vertex, which was acquired by an Oak Hill-consortium last year, has laid off about 300 people in India this year. The BPO firm has suffered a series of setbacks, including the recent case of a key client, UK’s online train ticket retailer Trainline, moving back work from India.

Vertex India CEO Ashish Taneja is also learnt to have put in his papers. The BPO firm’s employees were informed about Taneja’s resignation on Thursday. The reason behind the move could not be ascertained.

The lay-offs, involving 300 Vertex employees, are in addition to the 500 Vertex employees that were transferred to BPO firm ExlService Holdings late last year when Vertex transferred its customer management contract with UK-based telecom firm Orange to the Indian BPO. Vertex employed about 1,800 people in India last year and this figure, according to the company, has now come down to 1,200.

Vertex has suffered a couple of client setbacks recently. One of its key client loss was that of its former parent company, United Utilities. The BPO had 100-150 agents working on that particular account. More recently, Trainline decided to stop outsourcing work to Vertex’s India centres. Vertex had about 150 people working on it and they were all asked to leave. “In case of an account loss, it’s not only people working on that account who are impacted but also the support staff,” said a company source.

Responding to an ET questionnaire, a company spokesperson said, “The nature of outsourcing is such that contracts do come and go according to our various clients’ change in circumstance/strategy and like any other BPO business, we have to be ready to accommodate those changes. As with all Vertex business sectors and locations, employee numbers can fluctuate up or down at any given time and this is certainly not an indication that we are downsizing our operation in any way.”

[LosingNow]

Couple of possible reasons come to top of mind ... I obviously do not know the specifics..

1. Voice-based BPO is going to decline in India. The cost arbitrage is vanishing (if you add turnover, retraining costs) and quality of customer experience sucks.
2. Company appears to have high concentration of business with 1-2 clients.. this is always problematic

[Libran]

Couple of possible reasons come to top of mind ... I obviously do not know the specifics..

1. Voice-based BPO is going to decline in India. The cost arbitrage is vanishing (if you add turnover, retraining costs) and quality of customer experience sucks.
2. Company appears to have high concentration of business with 1-2 clients.. this is always problematic

Agree on the two points above... unless you are a tier one / tier two, de-risking is not a great option and companies do tend to put all their eggs in one basket.. Non voice is the way forward...again not just labor arbitrage but do things better, do it differently, quality and an ability to provide comfort to the customer that we can protect their interests ( data and confidentiality)

Not sure how big Vertex is ... may not be very big ... the top are anyways Genpact, WNS, IBM Daksh, Wipro BPO followed by Infosys BPO, Nipuna (Satyam), Mphasis BFL etc.,... I am not including Accenture, ACS and OPI here ...

So Vertex must be a Tier 3 maybe 4 ...

Any loss of account is painful ...

[Blwe_torch]

oops....just when I was considering my 'big decision'!

[Libran]

oops....just when I was considering my 'big decision'!

Move to one of the Big 5 or MNC or the top 3 Telecom companies .... there is nothing to worry except a 'force majeure' event 

[Blwe_torch]

oops....just when I was considering my 'big decision'!

Move to one of the Big 5 or MNC or the top 3 Telecom companies .... there is nothing to worry except a 'force majeure' event 

I know...thanks!

[achutank]

recently i had also read of TCS wanting to offload about 500 people. this is an "unindian" thing actually, not known here. of course it is common in US where they retrench and hire in thousnads based on projections and results.

i wonder if the great indian working populace is ready for mass retrenchment of this variety

of course it happened once during the dot com bust when a lot of companies went downunder (the example of thie etrading company comes to mind which had sachin and hritik endorsing and the next day the founder was in jail and still is, talked to couple of guys who worked there and they said were in such a shock when they saw the lock on the office and the legal notice and the damn CBI questioning them)

[Blwe_torch]

the IT/ BPO companies have provided mass-employment for past 10 years or so. Even that was not a known practice...and rather 'unIndian'.
If we can enjoy mass-employment and 6 figure salaries then we must be ready to face mass-retrenchment too....comes with the 'territory'....as the English wicket-keeper once famously said.

[Libran]

All these reports of Indian companies retrenching by the 100s is a little far-fetched... Yes , 500 people would probably get removed from the sytem... but it is not an one-day affair.. it is a long drawn process...and could be a result of performance / integrity.
What the news channels and papers report is tuned to make it sound big and gruesome... their way of selling news. Real picture emerges from analyst reports rather than a ToI , a Deccan Chronicle or a HT.

If people have been offered jobs during campus interviews, delays have occurred in getting them on board as comapnies do not want to carry 'bench' or a potential order has been delayed ...
People who have come on board do get retrenched if they do not pass thru' the gates of knowledge and competence(campus interviews are so quick that mistakes in resoucing do occur)

All this builds up and a quarter could see some large number leaving the organization... a blip in an otherwise normal attrition pattern

[justforkix]

I don't anything wrong with the US hire and fire policy anyways....

[Cover Point]

Realistically looking at the Indian market the margins for major businesses are going down.

If you go with the full costs of doing business the costs in India are relatively high... specially in cities like Bangalore and Bombay.  Also, now we are scraping the bottom of the barrel in terms of talent.

Having just setup a group in India, I am now getting pressure to move additional growth to Hungary (we are merging with another company with operations there). Our company also has opened operations in Phillipines which are cheaper than Bangalore.

I think India's dramatic growth times are over. We will still see India grow from intrinsic growth but the major push from outside is over. Infact over the next 10 years you will see reverse drain. Its harder for me to justify the costs of India operations vs other global locations (including smaller US locations like North Carolina).

I think Indians like me may still push operations in India due to selfish reasons but India has a hard time competing objectively in global context and it will get harder if the talent in India keeps behaving the way they do.

[LosingNow]

Realistically looking at the Indian market the margins for major businesses are going down.

If you go with the full costs of doing business the costs in India are relatively high... specially in cities like Bangalore and Bombay.  Also, now we are scraping the bottom of the barrel in terms of talent.

Having just setup a group in India, I am now getting pressure to move additional growth to Hungary (we are merging with another company with operations there). Our company also has opened operations in Phillipines which are cheaper than Bangalore.

I think India's dramatic growth times are over. We will still see India grow from intrinsic growth but the major push from outside is over. Infact over the next 10 years you will see reverse drain. Its harder for me to justify the costs of India operations vs other global locations (including smaller US locations like North Carolina).

I think Indians like me may still push operations in India due to selfish reasons but India has a hard time competing objectively in global context and it will get harder if the talent in India keeps behaving the way they do.

Excellent points.. cost of talent in IT (with all the associated "fickleness") and high cost of operations in cities like B'lore/mumbai is a serious issue.

Go moffusil, man.

[Cover Point]

Realistically looking at the Indian market the margins for major businesses are going down.

If you go with the full costs of doing business the costs in India are relatively high... specially in cities like Bangalore and Bombay.  Also, now we are scraping the bottom of the barrel in terms of talent.

Having just setup a group in India, I am now getting pressure to move additional growth to Hungary (we are merging with another company with operations there). Our company also has opened operations in Phillipines which are cheaper than Bangalore.

I think India's dramatic growth times are over. We will still see India grow from intrinsic growth but the major push from outside is over. Infact over the next 10 years you will see reverse drain. Its harder for me to justify the costs of India operations vs other global locations (including smaller US locations like North Carolina).

I think Indians like me may still push operations in India due to selfish reasons but India has a hard time competing objectively in global context and it will get harder if the talent in India keeps behaving the way they do.

Excellent points.. cost of talent in IT (with all the associated "fickleness") and high cost of operations in cities like B'lore/mumbai is a serious issue.

Go moffusil, man.

I guess I am not as cool in non ganguly affairs. What does moffusil mean?

[LosingNow]

small town..

[Cover Point]

small town..

agree ... places like Hyderabad are definitely better (you ofcourse know better). But dont you think that makes only a 10% difference and the growth there will catch up too? So even in mid term it will be an issue. In anycase I did not meet a single Kannadiga in Bangalore in my interviews. The lead came from Hyd and others were mostly Tamilians so people are already moving around.

I think in the long run unless the attitude of people dont change the IT growth is a done deal.

You know  the biggest issue I found (even bigger than cost etc) was that there were very few people with the experience needed. People are so used to jumping every 6 months that they never get the knowledge that I would expect from people with 3-5 years of experience

[prfsr]

small town..

agree ... places like Hyderabad are definitely better (you ofcourse know better). But dont you think that makes only a 10% difference and the growth there will catch up too? So even in mid term it will be an issue. In anycase I did not meet a single Kannadiga in Bangalore in my interviews.

You are outsourcing Ganguly bashing?  That is just plain lazy....

[LosingNow]

small town..

agree ... places like Hyderabad are definitely better (you ofcourse know better). But dont you think that makes only a 10% difference and the growth there will catch up too? So even in mid term it will be an issue. In anycase I did not meet a single Kannadiga in Bangalore in my interviews. The lead came from Hyd and others were mostly Tamilians so people are already moving around.

Hyderabad is not a small town.. I meant even smaller.. more stable and committed workforce

I think in the long run unless the attitude of people dont change the IT growth is a done deal.

You know  the biggest issue I found (even bigger than cost etc) was that there were very few people with the experience needed. People are so used to jumping every 6 months that they never get the knowledge that I would expect from people with 3-5 years of experience

This is a serious serious problem. There is no focus/intent on learning & excelling.. i posted this issue in the "suicide" thread.

[Cover Point]

small town..

agree ... places like Hyderabad are definitely better (you ofcourse know better). But dont you think that makes only a 10% difference and the growth there will catch up too? So even in mid term it will be an issue. In anycase I did not meet a single Kannadiga in Bangalore in my interviews.

You are outsourcing Ganguly bashing?  That is just plain lazy....

No. It is called leveraging your team. The more I can get the better and more diverse the bashing would be. Brilliant as I am, my impact at baiting the Gangulians is diminishing (it is still there but if you notice no one left the DG in a huff when I posted the Ganguly is spoiling the kids thread )

[Cover Point]

small town..

agree ... places like Hyderabad are definitely better (you ofcourse know better). But dont you think that makes only a 10% difference and the growth there will catch up too? So even in mid term it will be an issue. In anycase I did not meet a single Kannadiga in Bangalore in my interviews. The lead came from Hyd and others were mostly Tamilians so people are already moving around.

Hyderabad is not a small town.. I meant even smaller.. more stable and committed workforce

I think in the long run unless the attitude of people dont change the IT growth is a done deal.

You know  the biggest issue I found (even bigger than cost etc) was that there were very few people with the experience needed. People are so used to jumping every 6 months that they never get the knowledge that I would expect from people with 3-5 years of experience

This is a serious serious problem. There is no focus/intent on learning & excelling.. i posted this issue in the "suicide" thread.

I think the even smaller towns are not effective.

I have a friend in Ambala who struggled to get his outsourcing business going. Companies dont want to go to such small places. And talented people want to go where more jobs are. Its no different than small towns here in the US which have a hard time attracting larger employers needing skilled talent.