American Express may sell a part of its BPO unit

American Express is looking to sell a slice of its back-office operation in India, at least three people with knowledge of the plan said, putting it on track to join a long list of overseas firms, that have shed their captive business process outsourcing (BPO) units in the country.

A portion of the back-office operation providing travel-related services for its international clients is being hived off, and talks have started to sell this piece of the business, one person told ET, but declined to divulge details. Another person privy to the plan said the move is a precursor to the eventual sale of the entire BPO unit.

The second person said the financial and travel services provider may even divest some stake in the BPO unit to induct a partner to manage the operation. Industry experts estimate the unit could be valued at around $300 million (Rs 1,500 crore). An AmEx spokeswoman said: “We can’t comment on market speculation or rumour.”

AmEx’s BPO unit in India is a captive one. It caters only to the bank’s own clients, providing back-office support covering travel-related services, credit cards, accounting, customer care and related processes for the company’s worldwide operations. AmEx has never publicly announced the number of people it employs in India, but those familiar with its business put its headcount in the country at around 7,000. The travel service centre, for which it is looking for a buyer, employs around 500.

Late last year, American Express said it had laid off “less than 100 employees” at its BPO in Gurgaon near Delhi. AmEx also outsources work to several local BPOs and software vendors in India. Its tiny banking operation in India was acquired in 2007 by Standard Chartered as part of a global deal. If American Express sells its BPO unit, it will be following in the footsteps of those such as Aviva, GE, British Airways and Conseco, all of whom decided it was cheaper to outsource the work to specialist providers of back-office and customer care services.