The Telegraph
Since 1st March, 1999
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First prick to call centre bubble

Mumbai, April 23: Under pressure from legislators, a US-based company has decided to wind up its call centres here and relocate them in America.

The move by eFunds International, the Indian wing of eFunds Corporation, follows a recent legislation passed in the state of New Jersey to protect jobs in the US. eFunds processes the electronic card system for 200,000 New Jersey welfare and food stamp recipients.

Its two call centres here employed about 2,300 people and were providers of electronic payment, risk management and related information technology and business process improvement services.

It is not clear when the centres will down their shutters or in what manner they will compensate their employees, if at all. “Not many people in the call centre industry here are aware of this,” said Niranjan, who works for a call centre run by an Indian company.

While the New Jersey legislation is expected to be complied with for work done for the local government — which eFunds has been doing — private companies are under no obligation to abide by it. Outsourcing jobs, such as running call centres as part of customer service, are largely in the private sector.

In 2000, when it entered the business in India, eFunds had cited cost-saving as the reason. It has been estimated that American companies save about 20 per cent by locating call centres here.

The Nasdaq-listed eFunds International set up its first call centre as a 1,000-seater over 32,000 square feet with an investment of $4 billion. The second, a 1,300-seater built over 52,000 square feet, was established in 2002.

The lean, mean new US office to be run by eFunds will have a dozen workers, serving 155,000 food stamp recipients and 45,000 welfare clients at a cost of 36.9 cents per client per month.

Call centres in India, which usually employ young graduates who are taught an American accent and are willing to work night shifts, pay each employee not more than $2-3 an hour.

This has led to a boom, with many MNCs, including GE, picking India. British Telecom is planning to enter the business. The latest industry to join the call centre business is medical services, for which call centres in India would mediate between hospitals and insurance companies abroad. Apollo Hospitals has recently struck a record deal with an American hospital in this area.

But this has also led to widespread protests in the US that the country’s youth were losing jobs to Indians and other Asians that led to the legislation being drawn up in eight states — Connecticut, Delaware, Maryland, Missouri, New York, Washington and Wisconsin.

The effort, while criticised by US industry, which said it was a wrong move in the era of globalisation, was hailed by lawmakers keener on addressing concerns over job losses.

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