Convergys shuts down Mumbai facility
SOURCE: EconomicTimes
DATE: August 5th, 2008
Mohit Soapbox:
Signs of time. Mumbai is also one of the most expensive cities to operate a low cost delivery business from. Multi location facilities across the country are still a requirement for larger players to offer choices to customers but given the slowdown this is not un heard of. Shutting an entire center down has to be recession related and hard to classify that as a performance related closure. Mumbai had typically seen financial services firms setting up their captives/back offices and specialized centers in the city. The cost of operations of these locations has always been higher than other cities but people have been able to sustain and grow these centers because the rapid growth in the financial markets around the world had not warranted a close check on the cost. Mumbai is a hub and will continue to stay a hub for financial services. Does it work for a back office though is still hard to say. A number of locations in the NCR region around Delhi have mushroomed to offer ‘high end’ knowledge process work and back office functions. A number of our clients have decided to bypass mumbai as their choice of location even in financial services citing high cost of set up and operations.
ARTICLE
Leading contact centre and billing solutions firm, Convergys Corp, is shutting down one of its eight centres in India. The company has asked most of its employees at its Malad centre to resign. The centre employs around 400 executives. The employees will be given a severance pay if they continue until the end of the month, according to statement issued by the NYSE-listed Convergys.
Although there have been recession-related lay-offs in the past, this is the first such instance of an entire facility being shut down. Convergys has two centres in Mumbai in the suburbs of Thane and Malad. Sources said a few employees at the Thane centre have also been asked to leave.
However, the company did not comment on this or how many employees had been asked to leave the firm. “Convergys has decided to consolidate all existing business performed at the Malad facility and move it to other existing locations. The size of the project does not warrant Convergys continuing this business in a separate location, so Convergys intends to close the Malad facility by August 31, 2008,” the company said in an e-mailed statement.
“Employees who remain with Convergys on the date of closure and who are eligible under the applicable labour legislations will be paid statutory compensation. Additionally, Convergys will pay a severance benefit to employees who continue to service Convergys until the closure. Further, Convergys will consider transfer/relocation of employees to its other existing locations,” it added.
A person familiar with the development said most employees were choosing to leave rather than wait till the month end to collect the severance pay. An employee speaking to ET on condition of anonymity said a few employees from Malad were made to relocate to the Thane facility, but this was mostly at the senior level and based on their responsibility.
Instances of lay-offs are becoming more frequent with the continuing recession. Other firms that have laid off employees in the recent past include multinationals like Keane and Sapient, as well as Indian firms such as Tata Consultancy Services and Patni Computer Systems.
However, the Indian IT firms had cited non-performance rather than recession as the reason for the lay-offs.
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