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The Lehman Brothers’ Enigma and BPO industry

September 22, 2008

The bankruptcy of Lehman has a widespread impact and effect on Indian BPO market and the staff of these centers. Like me, you can also imagine that the employees of these centers are facing the utmost and acute problem of being jobless and in the consequential financial crunch. The running costs of living a life in major cities of any country could be high and similar is the case with India. Now that the employees have lost their job without any security of the finance or salary payments, they are on the cliffhanger of being swallowed by the financial requirements.

Let’s take an example of Lehman Brothers’ BPO in Powai, a Mumbai suburb. It is reported that around 1,200 employees are facing the problem in this single center. They have limited period of deadline to find a new job and they have been told that this month’s salary is their severance package. What reaction or mental state you could expect from such employees at present?

Though Lehman Brothers’ being bankrupt is a very distinct case and it does not happen often, still young people find it difficult to declare that the BPO industry is stable and not prone to disasters. This is one of the main reasons why they do not have the clear image of BPO industry and therefore many of them find it difficult to make a standing decision that they can go for a career in this industry.

The issue that arises now is that the employees of Lehman Brothers’ could find themselves in state of homelessness. The scenario of recruitment consultants is contrasting—they are being flooded with resumes and questions about opportunities that these employees can explore. Though I am not a financial consultant, I can easily guess that the salary issue at the present situation would in favor of employers. The renegotiation of salaries would have to be admitted by the employees seeking job and we can even expect that they would be paid a salary lessened by around 20-30%.

I need not relate you what was the situation of Lehman Brothers’ a couple of years back—reading this blog gives an indication that you already have some knowledge of financial news. However, it is hard truth that financial status of companies can change drastically within a year or two and this is what happened with Lehman Brothers’.

Particularly, in the Indian market, the situation is grim because of Lehman Brother’s bankruptcy. Lots of companies have suffered huge losses due to this event, which has clearly given an indication about the susceptibility of global financial market at present. However, many companies are unofficially trying to buyout Lehman Brother’s offices in India. Wipro, Copal and others could be seriously thinking about these issues. Even then, it remains to be seen what strength could be injected in the BPO sector at present due to these financial crisis and susceptibility of global economy.

At the global level, American companies and other organizations are trying to assess the situation and act accordingly, which is pregnant with a cautious approach because even experts did not expect this sort of crunch so quickly. For rivals of Lehman Brothers’, it would be a great chance to pick up the clients and try to expand their business.

At the end, we get a bit of foggy-picture: there is no surety what will happen in future about the employees and bankrupt offices of Lehman Brothers’. There is uncertainty about what will happen to the BPO industry and global economy. Wait and watch would be the mantra that we need adopt at present and perhaps many of us are already doing it.

Related posts:

  1. Wipro, Copal Partners may buy Lehman BPO Indian Unit?
  2. Futuristic State of Indian BPO Industry
  3. Impact of European crisis on the Indian BPO Industry
  4. India’s ITES/BPO Industry Turns to Domestic Market, New Geographies in Difficult Times
  5. Slump hits the bride outsourcing industry


Written by Vivek Kumar · Filed Under BPO Blogs 

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