CHENNAI,INDIA: Even as Nasscom released the FY08 revenue feat and FY09 forecast for the Indian IT Software and Service Sectors in July 2008, Som Mittal, president, Nasscom said that opportunities and challenges would see newer business models and a change in the industry dynamics.

Shrinking employee base

In the outsourcing arena, companies have already begun taking remedy measures to wither the storm and turbulent economic conditions by shrinking their employee base.

When Sapient Corp fired about 160 employees at its Gurgaon, Bangalore and Noida centers due to insufficient experience, it raised a few eyebrows.

Keane Inc., by the end of May 2008 had retrenched close to 400 employees and officials had stated that this was done to fuel integration of the company’s processes in the country.

Reports of 24/7 Customer sacking 450 employees might come as a rude shock to many. But the firm denied it had pink slipped any of its employees.

24/7, however, admitted in an e-mailed statement that it had been affected as one of its clients announced a phased ramp down of its offshore call centre partnerships in India due to change in its business strategy. 

“We have taken specific steps to support all employees servicing this client and have provided these employees with the option of pursuing their careers in other centers of 24/7. As an alternative option, we are also assisting them to find employment opportunities outside 24/7 through collaboration with other companies,” said Pradeep Narayanan, president, New Services and Global Chief Infrastructure/Risk Officer, 24/7 Customer.

He added that nearly 70 per cent of the affected employees took up these options.

Future gloom?

“Not at all, we would certainly wither the storm,” said Pramod Bhasin, CEO of Genpact, when asked about the tough conditions affecting the Indian IT-BPO companies.

Speaking on Nasscom’s survey, Mittal stated, “The Indian IT-BPO industry’s resilience is reflected in its FY07-08 performance, with a 28.2 per cent overall growth rate and next year’s projected growth between 21-24 per cent. Given that we are well on our way to achieve the target of $60 billion in exports by FY09-10, the industry is now focusing on improving productivity, efficiency, as well as opening up new markets and services”

Mittal further added: “Challenges are part of every industry and retrenchments are also part of the business and we will need to prepare ourselves for these. Nasscom is developing a long term vision for 2020, to chart out the roadmap for all stakeholders and help them tap into this opportunity”.

Companies are increasingly looking at different models in order to maintain the growth and retrenchments according to analysts are just a passing cloud in the growth phase of entities who would want to appear lean and mean.