Firstsource bags Rs 1.45 bn Idea deal

Business process outsourcing firm Firstsource Solutions Ltd said on Tuesday it has secured a five-year, Rs 1.45-billion outsourcing contract from mobile operator Idea Cellular.

Firstsource will provide a range of services, including customer service, billing, new product information and plan details-related interaction services to Idea from its centre in Coimbatore in Tamil Nadu, it said in a statement. The outsourcer derives about 34 per cent of its revenue from services to the telecom sector.

UBS in talks with Infosys, Wipro for sale of BPO, KPO units

Switzerland-based bank UBS is believed to have put its business process outsourcing (BPO) and knowledge process outsourcing (KPO) units up for sale. The bank, which has centres in Poland and Hyderabad, is in talks with Indian IT companies such as Infosys and Wipro, said a person familiar with the possible transaction.

The UBS India Service Centre (ISC), along with its Krakow (Poland) centre, is valued at around $200 million, according to another source. The story was first reported by ET NOW. When contacted, Infosys CFO V Balakrishnan denied that they were in talks with UBS, while Wipro chief strategy officer and head of M&A KR Lakshminarayana declined to comment on the deal. A UBS spokesman in an e-mail response to ET said: “UBS continually seeks to explore commercial opportunities in all jurisdictions in which it operates that have the potential to be of benefit to the the company and its component businesses. However, UBS remains committed to all its activities in India.”

Wipro, which had bought Citi’s captive technology arm in December 2008, is learnt to have started a preliminary due diligence of the UBS unit. Both Infosys and Wipro are IT vendors for the bank and provide software development services along with application and maintenance services.

Incidentally, Wipro had also helped the Swiss bank set up its captive operations in Hyderabad. UBS had invested over $70 million to set up its unit, which employs 2,100 people. The bank also has a 250-seater unit in Poland, which became operational in 2008.

HDFC acquires 26% in Bangalore rural BPO firm

India’s $12-billion BPO industry has now reached Bagepalli, a rural pocket sitting on the margins of the arid Rayalseema belt in Karnataka’s Chickballapur district. And it’s off to Purnia in Bihar as the rapidly expanding telecom and insurance firms seek native language help desks and data processing in the hinterlands, closer to their markets.

In a possible affirmation of its belief in the rural BPO story, HDFC, the country’s largest home finance company, has picked up 26% stake in Bangalore-based RuralShores Business Services, a rural BPO firm floated by six technocrats last year.

The ‘ruralshoring’ start-up aims to link up about 500 locations, with a population below 20,000 to the fabled BPO script over the next seven years. This rather small transaction for HDFC was driven straight from its top echelons implying its significance.

RuralShores—with a promoter list that include former E&Y honcho V V Ranganathan, Mastek MD Sudhakar Ram, former MD of Xansa India Murali Vullaganti and G Srinivas of Dawn Consulting—confirmed HDFC’s entry as a significant minority investor.

Ruralshoring, a push towards shifting less complex BPO work to inexpensive rural locations, is the new buzzword for the knowledge economy, as these hamlets could possibly evolve into the back-office of corporate India. The BPO firms have been moving hinterland - to the semi-urban centres - but the final push is in the offing with firms like RuralShores taking downstream work to rural pre-graduates who are employed under daily minimum wage regulations.

BPO firms like Xchanging, which acquired Cambridge Solutions, and Hinduja Global Solutions have ventured into semi-urban places like Shimoga in Karnataka and Durgapur in West Bengal.

HDFC Bank through a fully-owned arm kicked-off captive operations at Tirupati last year, while Tata Chemicals came up with back-office centres at Barala in Uttar Pradesh and Mithapur in Gujarat.

“We typically look at setting up 80-100 seater centres in towns with a population of 10,000-15,000 with a cluster of villages around it. The work timings are between 6 am to 10 pm in two shifts with each centre employing 150-200 people,” says Murali Vullaganti, CEO of RuralShores. The firm operates two such centres at Bagepalli and Ratnagiri near Vellore in Tamil Nadu where they operate along with the local schools.

Infosys BPO hires from smaller cities to cut costs

As the economic slowdown hit most sectors, cost rationalisation has become imperative for companies to survive. In this exclusive report Sunanda Jayaseelan get us the story of the Infosys BPO in Bangalore and how they are reviewing their HR strategy to save costs.

It maybe a late entrant into the domestic market, but Infosys BPO is hoping to catch up fast. and to do that, it is adopting an aggressive policy to save costs.

Senior VP & Head - Global Delivery, Infosys BPO, Swami Swaminathan said, “If you look at Indian companies, the level of intensity of skills that you require is less and therefore we are able to hire from Tier 3 and 4 cities and get those folks here and the cost is less.

It is hiring employees from tier 3 and 4 towns instead of top cities, and is offering salaries 10-15 per cent lower than its counterparts. It hopes that cut in training costs and lower rentals in smaller towns will add up to 30 per cent cost efficiencies. This is going to be its strategy to expand its presence as well.

CEO, Infosys BPO Amitabh Chaudhry said, “The Indian BPO market will only grow rapidly over the next 5-7years. We expect to double our revenues from this market going ahead especially the SG&A kind of activities will only increase.

This approach seems to be a win-win for both Infosys BPO and the employees....for employees, the carrot is that they will not have to work night shifts. For Infosys BPO, …. it gives them the advantage of hiring employees at a lower cost now who over a period of 24months will be ready to service even international clients.

TCS, Wipro eye $200 mn BPO deal from UK’s RMG

India’s top tech firms TCS and Wipro, apart from several multinational rivals, are preparing to bid for a $200-million outsourcing contract being considered by Britain’s public postal service Royal Mail Group (RMG).

The contract is part of a $2-billion technology-led transformation being planned by RMG, even as Britain readies to part-privatise its premier postal service and help it compete better with private sector rivals.

When contacted by ET last week, an RMG official confirmed that some India-based service providers have expressed interest, but declined to comment any further. The last date for submitting the bids is June 25.

“The invite is open to all and not restricted to Europe. I can also confirm that interest has been received from companies based in India. However, the details are confidential,” said Tam Curran, senior procurement manager (IT), RMG. “We are currently assuming contract award in early-2010,” he added.

The contract is the third in a series of deals worth around $2-3 billion being pursued by offshore service providers, including TCS, Infosys and Wipro, from the UK’s state-owned departments.

While TCS has already won a contract from the UK’s Child Maintenance and Enforcement Commission (CMEC), another state-owned organisation Transport for London (TFL) has requested tech vendors to bid for an outsourcing contract worth $100 million.

“RMG is seeking to deal with a systems integration and business transformation partner to undertake a programme of transformation of the e-Business capability of the Royal Mail Group, including the design, development, hosting and ongoing operation of all web portals offered by the group,” RMG said in a tender document published past month.

The contract could become a much bigger engagement depending upon how it evolves. Government IT spending in the UK is estimated to be $36 billion a year, Bob McDowall, research director at TowerGroup Europe, told ET.

“The transformation may also require the selected partner to migrate from or take responsibility for the existing e-Business operating model of the Royal Mail Group, including technology platform(s) and third party service relationships,” RMG added in its document seeking bid from potential vendors. TCS, Wipro and Infosys declined to offer any specific comments.

A review of the UK’s public sector IT spending by the country’s treasury department earlier this month identified the potential of around $10.6 billion in annual savings.

“Back-office operations and IT, led by Martin Read, recommends better management information, benchmarking and review of costs, and better governance of IT-enabled change programmes to achieve $5.9 billion of savings a year on back office operations, and $4.7 billion of savings a year on IT spending,” HM Treasury said in its study titled Operational Efficiency Program.

Despite anti-offshoring sentiments being raised in the US, Indian tech vendors are hoping that they will be able to participate in bigger transformational contracts being considered by the UK’s public sector departments.

The UK’s state-owned departments are seeking help from the Indian offshoring industry to bring troubled government technology systems back on track and lower the cost of managing government IT systems anywhere between 25-40%.

The UK’s national healthcare modernisation programme, pegged at almost $9.6 billion, is among some of the initiatives that failed to deliver.

However, these lucrative public sector contracts will also bring a high amount of complexity and labour unrest given the fact that they are some of the biggest employers in Britain.

“We have to be extremely cautious while setting expectations, because scrutiny will be high and some lobbies would be looking for opportunities to create unrest,” said a senior executive at one of the leading Indian tech firms preparing to bid for these outsourcing contracts.

TCS eyes $150-200 mn BPO deals

Tata Consultancy Services (TCS), the country’s largest software services firm by revenues, is competing for 5-6 business process outsourcing (BPO) deals worth up to $150-200 million, a senior executive said. The outsourcing deals are largely in verticals such as banking and financial services, retail and energy & utilities.

“In the banking and financial services space, there is a boom in the US in the mortgage and collections space,” TCS vice-president and BPO services head Abid Ali Neemuchwala said. The Indian IT firm is also seeing demand from life sciences and healthcare, telecom and media sectors.

TCS provides BPO services such as finance and accounting, human resources outsourcing, supply chain management and customer support through centres in India, China, South America and Europe.

TCS is also seeing new growth areas such as regulatory compliance and risk management emerge, in the aftermath of the financial crisis in the US and Europe.

North America and the UK remain the largest markets for TCS’ BPO business but the firm is also seeing traction in continental Europe, Latin America and India. Mr Neemuchwala said the focus of the BPO business in the domestic market is on deals in the travel and hospitality and insurance sectors. TCS is also competing for integrated IT- BPO deals in the government sector in India.

In a bid to gain clients that remain wary of making new investments in IT, the Indian IT firm is using its platform-based BPO model whereby it makes investments in the platform — finance & accounting, for instance — and the client pays on the basis of his usage. “The margins are higher in this model as it’s non-linear,” Mr Neemuchwala said.

The BPO business contributed about $450 million to TCS revenues last fiscal. TCS had acquired Citigroup Global Services, Citi’s captive BPO unit in India, for $505 million last year. As part of the deal, Citi had signed an agreement to provide business worth $2.5 billion to TCS over a period of 9.5 years.

India’s BPO sector is estimated to have generated revenues worth $14.7 billion in FY09. The sector employs about 1 million people directly. According to a Nasscom-McKinsey study, the total addressable market for the BPO industry is $630 billion.

Wipro BPO to hire 8,000, optimistic on double-digit growth

Despite the continuing impact of the slowdown, Wipro BPO is optimistic about posting double-digit growth in financial year 2010 (FY10). The unit’s head said he sees the market for BPO services improving in the next few months.

Ashutosh Vaidya, senior vice-president and head of Wipro BPO said, “The slowdown, especially in the peak business period of November to February, meant that we posted around 20 per cent growth in the last financial year. Though there is still short-term decline, we are confident that we will see double digit growth in FY10.”

The BPO division of Bangalore-based Wipro had seen its growth rates dip from the traditional 30-40 per cent to around 20 per cent in FY09. The unit contributed over 8 per cent or $395 million to Wipro’s IT services revenue of $4.3 billion.

According to Vaidya, the BPO firm is seeing increased interest from existing and prospective customers both in size and type of deals.

“However, it takes between 4-6 months for a deal process to complete, so we expect to see revenue impact flowing in only after that period.”

The unit is also looking at recruiting 8,000 people this year. While some will be employed in Wipro BPO’s seven international centres, majority will be hired in India. The division has a work force of 22,624 people with 10 per cent based outside the country.

Vaidya said setting up new centres abroad is also on the cards this fiscal. While he declined to name the locations, Wipro officials have earlier spoken about expansion of BPO presence in China and Philippines. In FY09, the unit set up three new centres outside India including in Brazil and Wroclaw near Warsaw in Poland.

Wipro BPO is also looking to strengthen its domestic presence, he said. It currently has around five Indian customers including three in telecom sector and other MNCs with local presence.

Infy BPO sees FY10 revenue up 10-15%

Infosys BPO Ltd, the business process outsourcing subsidiary of Infosys Technologies, expects revenue to rise 10 to 15 per cent in the year to March 2010 but pricing is under pressure, its chief executive said.

"Clients are under pressure anyway so they are putting pressure across the board," Amitabh Chaudhry said. He said the outsourcing business environment would remain uncertain for the next 12 to 18 months as western clients struggle.

"Maybe we are near the bottom, how long we will remain at the bottom God only knows." India's back-office outsourcing firms like Infosys BPO have so far thrived by providing Western firms with services such as processing insurance claims, managing payrolls and customer support.

The boom in business process outsourcing, or BPO, is built on a large, skilled and cheap English-speaking workforce, but a global economic slowdown has crimped spending by global.

Wipro BPO to open two centres overseas

Wipro BPO, the business process outsourcing arm of soaps-to-IT services player Wipro Ltd, plans to expand its operations in China and the Philippines by opening two more centres in these countries by the end of this year. While the company plans to open a 500-seat centre in Chengdu (China), it intends to have a 1,000-seat centre in Manila (the Philippines).

While the Manila centre would service the company’s BFSI and Hi-Tech manufacturing clients, the Chengdu centre would cater to the firm’s telecom and utilities customers.

Aegis BPO to add 12,000 global staff

At a time when the Bangalore versus Buffalo City debate spooks BPO employees in India, Essar Group’s backoffice unit Aegis will augment its workforce by 12,000, summing up the total headcount to 43,000 by end of this financial year.

The company plans to hire 1,000 people every month in India and across United States, Philippines, Costa Rica and Africa where it currently has operations.

“We will be recruiting a thousand people every month, so this year we will add 12,000 to our workforce globally. We have already hired 3,000 people since the beginning of this financial year,” Aegis managing director and Global CEO Aparup Sengupta said.

US President Barack Obama had last month announced end to years of tax incentives to those US companies, which create jobs overseas in places such as Bangalore.

Instead, the incentives would go to those creating jobs inside the US, in places such as the Buffalo city — bordering Canada in upstate New York.
“The Ruias-led company has earmarked a capital expenditure of $30-35 million this year, excluding cost on infrastructure,” he said.

Despite the downturn, Aegis is eyeing a turnover of over $550 million and aims to grow by over 50 per cent in FY10.

“There is still an opportunity for outsourcing. In the next 10 years, domestic business will expand to $50 billion, which is a case for the Indian BPO industry to go after. International BPO business will be another $50-70 billion,” Sengupta said. He said demand will keep up because of changing consumer behaviour, rising discretionary spend and the youth, which does not live frugally.

The 10 Riskiest Locations In The World For Outsourcing

The list, built around concerns over terrorism, pollution, and geopolitical tensions, includes cities from a range of countries that could otherwise constitute a round-the-world tourism dream: Thailand, Jamaica, South Africa, Brazil, India, Israel, the Philippines, and Colombia. Read on to see if your company's global outsourcing map matches up with this list of the world's10 riskiest locations for outsourcing.

Here are the top 10 as ranked by Brown & Wilson, authors of the annual "Black Book of Outsourcing":
1. Bogota, Colombia
2. Bangkok, Thailand
3. Johannesburg, South Africa
4. Kuala Lumpur, Malaysia
5. Kingston, Jamaica
6. Delhi/Noida/Gurgaon (NCR), India
7. Manila, Philippines
8. Rio do Janeiro, Brazil
9. Mumbai, India
10. Jerusalem, Israel

8 Indian cities in world's 25 riskiest offshoring locations

Here comes another overseas study and another bout of India-bashing. India may have been hailed for long as the world's top outsourcing destination, but according to a survey in the annual Black Book of Outsourcing, as many as 8 Indian cities are among the world's 25 riskiest places for offshoring.

And what are the reasons for this, according to this study? Mainly, concerns like terrorism, pollution and geopolitical issues, etc. Meanwhile, global management consulting firm A T Kearney says that although India is the world's favoured back-office, the Middle East and the North African region are slowly emerging as promising offshoring destinations because of large, well educated population and proximity to Europe.

Anyway, for whatever the study is worth, here are the eight riskiest offshoring destinations from India.

1. Delhi, Gurgaon, Noida: 6th riskiest in the world
2. Mumbai: 9th riskiest in the world
3. Chandigarh: 15h riskiest in the world
4. Pune: World's 20th riskiest
5. Chennai: 21st riskiest in the world
6. Bangalore: 23rd riskiest
7. Hyderabad: 24th riskiest
8. Kolkata: India's least risky BPO destination

World's top BPO destinations

Which are the hottest countries for outsourcing? The question might sound a bit ill-timed with the US financial crisis weighing heavily on BPOs. However, while US financial crisis may cause some short-term pains to BPOs worldwide, it is also believed that the crisis may accelerate global sourcing adoption as financial institutions push the envelope on offshoring to cut costs.

Similarly, analysts also feel that outsourcing will get a boost after the US presidential elections. So, again which will be the top destinations to benefit once this work starts flowing globally.

Here's a look at the top global outsourcing destinations as well as the emerging ones according to a recent study by Global Services, a magazine for global outsourcing and BPO industry and Tholons, a global research advisory firm.

India
Yes, India continues to retain its numero uno position as the sought-after destination for companies globally. The country is home to as many as six of the world's top eight outsourcing hubs. The company retains it position amid a determined bid by neighboring China to give tough competition.

The six Indian cities in the list of top eight outsourcing cities of the world are: Bangalore, Chennai, Delhi-NCR, Hyderabad, Mumbai and Pune. The list for top 50 emerging cities for outsourcing includes four Indian cities: Kokata at no. 6th, Chandigrah at no. 12th, Coimbatore at no. 17th and Jaipur at 31st position.

China
Incidentally, China has no representation in the world's top eight outsourcing cities. However, China dominates the list of emerging cities for global outsourcing with Shanghai and Beijing leading the list.

The list of top 50 emerging cities for global outsourcing includes six from China: Shanghai at no. 2, Beijing at no. 3, Shenzen at no. 10, Dalian at no. 16th, Guangzhou at no. 23 and Chengdu at no. 37.

Shenzen and Shanghai are now also offering services like application development and maintenance and business analytics. Consequently, China has become home to numerous IT and BPO service providers such as Accenture, Convergys, Infosys, IBM, TCS, Wipro, Infosys and Unisys having their centres across the country.

While pointing out the Chinese dominance in the outsourcing segment, the study said China's outsourcing industry is set to flourish further with a supportive government and favourable outsourcing conditions.

Ireland
One of the names in the top 8 global outsourcing cities is that of Dublin, Ireland. In recent years Ireland has seen a large no. of outsourcing deals, both in number and size, in relation to the economy.

According to a recent survey by Deloitte, Ireland is being increasingly seen as a location for higher value operations looking for an alternative location, leading to the creation of more skilled jobs.

However, the survey also adds that it is becoming increasingly difficult to sell Ireland as a low-cost offshoring location. Many companies are now choosing to locate higher value operations that can be offshored in Ireland, such as R&D centres.

Philippines
Mataki from Philipines also makes its place in the top 8 global outsourcing cities. Philippines has been trying to position itself as the next major global outsourcing destination, in competition with India and China. The country is aiming to grab a 10 per cent share of the $130 billion global market. Round-the-clock construction work of new office buildings is sweeping across the Philippines.

In fact, the BPO industry in the country is expected to weather the US-led global economic crisis, since much of the services outsourced to the Philippines are operational tasks that companies cannot do without.

Philippines BPO companies have launched a marketing campaign dubbed Experience Excellence, Experience the Philippines to attract more companies to outsource there not just for the quality of service, but also for everything else the Philippines has to offer.

Cities `gone cold'
Six cities from 2007 list failed to make it to the list this year. These include: Perth (Australia), Baguio City (The Philippines), Leeds (UK), Birmingham (UK), Oklahoma City (US) and Juarez (Mexico).

Three top executives quit Satyam BPO

Three senior support managers at Satyam Computer Services’ BPO unit have resigned. A company spokesperson said Satyam BPO global head (HR) Naresh Jhangiani along with V Satyanandam (head of corporate services) and Kulwinder Singh (head of marketing-Asia Pacific) have resigned.

“Apart from Jhangiani, the other two executives are from middle management. They had put in their papers a month or two back as they look out for better opportunities,” the spokesperson said. Last week Vineet Nayyar, the CEO of Satyam’s new owner Tech Mahindra, had said Satyam has an excess staff of 10,000. The spokesperson said that these exits do not have a bearing to the statement and “there would be no impact on the company of their exit.” “The company is looking at smoothening the process and no significant impact is expected on the daily operations,” he said.

Infosys BPO starts hiring again

It seems light is round the corner at the end of the tunnel. According to a report, Infosys BPO has opened the gates for hiring again. The company signals business needs and new projects as reasons why it has started rehiring.

The report says the company has about 200 vacancies coming up on a month on month basis. The report quotes BPO vice-president and HR head K Raghavendra saying that the openings are at the entry level and the company plans to recruit for various processes across all service offerings.

He added that the company is recruiting for both voice and non-voice offerings. Raghavendra also said that a few new positions are also being created and in certain other cases back fills are happening on account of attrition.

Infosys BPO had earlier been in news for laying off more that 600 contract workers. The BPO facility currently has about 17,238 employees. After Infosys concluded its annual performance appraisal exercise in mid-March, the company had shown door to 2,100 people across the country.

Earlier last week, Infosys Technologies said that it expects outsourcing demand to pick up in early 2010. Company's chief financial officer V Balakrishnan said, "At the macro level, there is some confidence back, people are slightly more comfortable, but on the ground things are still the same," referring to the global economic downturn that has battered information technology spending.

India's second-largest software services exporter is looking to spend between $200 million to $300 million to acquire firms in the technology infrastructure management, consulting and backoffice outsourcing to boost growth, he said.

Last month, Infosys forecast its first decline in annual revenue as global demand for outsourcing slowed down in a harsh economic climate, halting growth for India's once burgeoning technology services sector.

Wipro Tech ties up with Oracle

Wipro Technologies said on Monday that its Business Process Outsourcing divison, Wipro BPO has partnered with Oracle for 'best-of-breed HR platform solutions.'

Wipro has also selected The Hackett Group, a global strategic advisory firm, to provide empirical data, best practices and world-class performance insights on the development of its innovative bundled solution platform, it said in a release here.

The solution simPlify, allows employers to reduce and control cost as it provides an opportunity to centralise and standardise processes while eliminating duplicative management structures.

The solution has the ability to leverage a many-to-one technology capability, while maximising service quality and HR customer satisfaction.

IT-BPO sector sees 60% rise in female staff in 2 years in India: Survey

The number of women working in the IT-BPO sector grew 60% in the last two years to 6.7 lakh in 2008, as per a survey on gender inclusivity conducted by HR consulting firm Mercer and IT association Nasscom.

The survey that covered over 45 leading technology companies in the country also revealed that HR practices such as transportation policy of a company, besides flexible working hours and leave policy play a major role in attracting women in an organisation . Other practices that women workers appreciate are antiharassment policy, healthcare and awareness programs, women’s lounge or recreational activities.

“The Indian IT-BPO industry has set high standard in gender inclusivity . Women are a key and vital part of our workforce, and their participation in the workforce is seen as a critical enabling factor for continued growth of the industry,” said Nasscom vice president Sangeeta Gupta.

The report also put forth some recommendations for ensuring gender inclusivity at the workplace. It has suggested upgrading professional skills of women, setting up a mentorship program for women in an organisation , undertaking an internal study to identify where career paths for women reach a block, providing incentives in the form of tax benefits for organisations which fulfill certain criteria in empowering women.

The survey said that India has the largest number of working women in any single country in the world, which can be partly attributed to the growth of the IT-BPO industry. “Out of the 400 million worforce in India, around 30-35 % are female, and only one-fifth of these women work in the urban areas,” the survey pointed out.

Obama’s anti-outsourcing policy to hit Indian BPOs

Source: ndtv.com
In a move that will hit some 10 lakh Indian IT professionals and a sizable chunk of the country's BPO industry, US President Barack Obama has unveiled new proposals to end tax breaks for American companies that shipped jobs overseas to countries like India.

Meeting one of his major election promises, Obama said he will end the tax incentives to those US companies which created jobs overseas in places like Bangalore. Instead, the incentives would now go to those creating jobs inside the US.

"For years, we've talked about ending tax breaks for companies that ship jobs overseas and giving tax breaks to companies that create jobs here in America. That's what our budget will finally do," Obama said yesterday at the White House announcing the international tax policy reform.

"We will stop letting American companies that create jobs overseas take deductions on their expenses when they do not pay any American taxes on their profits," he said.

Obama said his administration will use the savings to give tax cuts to companies that are investing in research and development in the country to jump start job creation, foster innovation, and enhance America's competitiveness.

The new tax laws are expected to hit countries like India, China and Philippines, where US companies have been outsourcing their work. Nearly 60 per cent of Indian IT-Business Process Outsourcing industry caters to US companies, according to latest figures. India's BPO industry employs over 17 lakh professionals.

Hitting hard at the current taxation system, to which he had been very critical since his election days and as a Senator, Obama said the current tax code was "full of corporate loopholes" which made it easier for American companies to flout the law.

"It's a tax code full of corporate loopholes that makes it perfectly legal for companies to avoid paying their fair share. It's a tax code that makes it all too easy for a number -- a small number of individuals and companies to abuse overseas tax havens to avoid paying any taxes at all.

"And it's a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York," Obama said.

Reiterating his campaign rhetoric, the US President said, "The way we make our businesses competitive is not to reward American companies operating overseas with a roughly two per cent tax rate on foreign profits; a rate that costs taxpayers tens of billions of dollars a year."

Obama said he wants US companies to remain most competitive in the world. "But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens," he said.

He also announced a set of proposals to crack down on illegal overseas tax evasion, close loopholes, and make it more profitable for companies to create jobs here in the US, Obama said his series of tax reforms would save $210 billion in the next 10 years.

Under new measures, American companies would also have to disclose before the IRS details of the income American citizens are generating in overseas accounts.

"For years, we've talked about stopping Americans from illegally hiding their money overseas, and getting tough with the financial institutions that let them get away with it," he said.

Birlas shift BPO jobs to India

Faced with high costs and falling demand, the Aditya Birla group is shifting part of its back-office operations from Canada to India. Aditya Birla Minacs, the group’s BPO firm, has closed down its three centres, with a capacity to house 1,200 people, in Canada.

The company downed shutters of units at Pickering, Saskatoon and Chatham in Canada. Aditya Birla Minacs, which was acquired by the Birlas from the Minacs family in Canada in June 2006, is a division of the group’s
holding company Aditya Birla Nuvo. The company has 12 centres in Canada. BPO and IT business together constitute 13 per cent of Aditya Birla Nuvo’s total revenues.

Massive layoff notice at Convergys callcentre in Canada

Related Story: Call centre layoffs climb
Nearly half of all employees at the Convergys call centre in Kamloops could be looking for work by the end of June. According to Convergys officials, the company plans to lay off 240 employees, effective June 30. Amy Williams, a spokeswoman for Convergys, told KTW the layoffs are the result of an anticipated decrease in call volume because of "a change in client business" at the site.

While Convergys wouldn't say who the client is, a source told KTW the company is credit-card giant American Express, and employees working on its account, including management, will be let go. It is unclear if the layoffs effect full-time or part-time employees. The company told staff the news on Wednesday.

Williams said Convergys is actively looking for a new customer to serve the centre, which could negate the layoff. "If [a new customer] could be found, and we could get a deal before the June 30th date, but I can't speculate on that," she said.

She also noted the company is offering severance packages to employees. There are currently 600 employees at the Valleyview call centre. The company at one time was the largest private employer in Kamloops.

Last year, rumours swirled around possible closures of Convergys call centres after its CEO hinted the company might close unprofitable sites in Canada. As it turned out, its Red Deer operation was closed.

Mayor Peter Milobar said he hopes the impact of the layoffs will be "negligible" and the city can absorb them. "It's definitely not a good thing... obviously for the 240 people affected it's a very significant impact to their lives," he said.

He also downplayed the suggestion the layoffs are a sign Kamloops is being pulled into the worldwide economic crisis. Milobar maintained other major employers in Kamloops in areas such as the health and education sector, along with the likes of Domtar in the forest industry, are still doing well.

He also said because of its U.S. based customers and the trouble in that country's economy, it was always a question mark as to how long Convergys wold be able run at current levels.

This week, the Cincinnati Enquirer reported that the Cincinnati-based Convergys may look to break up the company this year:

"Spinning off the company’s struggling information management unit has been on the table for several months, but in January, CEO David Dougherty said the economic slowdown and turmoil in financial markets made it unlikely the company would split off the unit in the near-term," the newspaper reported.

"But it will be on agenda for management and the board this year as the Cincinnati-based company looks for ways to boost the value of its share, Dougherty said at its annual shareholder meeting today.

"Convergys is also struggling with a recession-related drop in call volume at its call centers, said Chairman Philip Odeen."