Tech Mahindra contests recall numbers

British Telecom Global Services (BTGS), which signed a $1 billion five-year outsourcing deal with Tech Mahindra in 2006, said more people would move offshore from its onsite project as the projects mature.

There are around 9,000 Tech Mahindra employees working for BTGS, outsourcing functions such as business processes and IT infrastructure, out of which 2,000 work onsite.

Tech Mahindra, according to some media reports, is likely to call back around 1,000 staff working onsite for its lead clients, British Telecom (800) in the UK and AT&T (300) in the US. However, addressing an analyst conference call today, Sonjoy Anand, CFO, Tech Mahindra, dismissed the numbers projected by the media as "preposterous".

"As the process matures, the onsite headcount reduces," said Chris Halbart, chief financial officer, BTGS. "It is a usual situation," he added.

The onsite headcount generally brings greater profit margin for services providers. It is also looking at a 40-50 per cent increase in role transitions over the next 12 months.

There have been around 1,200 role transitions in the last one year. Role transition means the movement of projects from contractors to Tech Mahindra. There are around 5,000 contractors working for BTGS, including those providing outsourcing.

"Currently, the onsite and offshore ratio for BT is 20:80," said L K Bhatia, V-P, resource management group, Tech Mahindra.

"Offshoring will increase over a period of time. Both BT and Tech Mahindra would like to have a certain percentage of people working onsite and offsite," he added.