Telecom software product company, Subex, has moved about 20 per cent of its work being carried out by its subsidiaries in Europe and the Americas to India to leverage the cost advantage and raise margins.
This could have affected over 200 non-Indian employees of the company who were ‘released’ in the last one year, according to Subex chairman, CEO and managing director Subhash Menon.
“Earlier, we had a lot of people overseas, which resulted in huge expenses for the company. We are gradually shifting these projects to India for the cost benefit and eliminate these overseas positions,” Menon said.
He added that only 20 per cent of the total work is now being done onsite, from 40 per cent a couple of quarters ago.
About 20 per cent of the company’s employees in the product business and all its employees in the services business are currently located abroad. During the first quarter ended June 30, Subex had about 1,150 employees in its product business and 170 in the services business.
The Bangalore-based company, which derives close to 15 per cent of its topline from British Telecom Plc (BT), its largest customer, reported a net profit of Rs 35.1 crore in the June quarter from a net loss of Rs 65.6 crore a year earlier. However, its topline dipped 13 per cent to Rs 117.6 crore.
The company managed to achieve this turnaround by significantly bringing down its cost of operations, including employee remuneration. “The (June quarter) results benefited primarily from the cost efficiency we managed to elicit,” Menon said.
By acquiring UK-based Azure in 2006 and Canadian firm Syndesis in January 2007, Subex had added 200 and 300 people respectively to its rolls.
Menon said that the telecom services provider market had been 'looking much better' over the last couple of quarters. Besides BT, the company’s top 10 clients include Telecom Italia, AT&T, Telstra and Swisscom, which contribute about 85 per cent to the company’s revenues.
