Covid-19: Quarter of Genpact staff to continue working from home, says CEO

Topics Genpact | Coronavirus | Lockdown

The company, which reported first quarter results on May 11, recorded total revenue of $923 million, up 14 per cent annually
Genpact, one of the largest business process management companies in the world, expects a quarter of its workforce to continue working from home even after the pandemic is over, marking a shift in an industry that is widely thought of as being used to working from a fixed workplace.


Chief Executive Officer Tiger Tyagarajan said: "In general, clients have been surprised and we have been surprised ourselves at the service level performance for almost 60 per cent… it is better than when they were working from office. Longer term, I expect about 25 per cent of work to be done from home in general."


The company, which reported first quarter results on May 11, recorded total revenue of $923 million, up 14 per cent annually, and income from operations was $111 million, a rise of 23 per cent year-over-year.


Withdrawing its financial outlook like most companies in the current scenario, Genpact said, in a filing with the US Securities and Exchange Commission, that the Covid-19 pandemic had a "minimal impact" on its operating results for the quarter ended March. "However, the company expects that Covid-19 will negatively impact its operating results in future. Because the duration and extent of the pandemic is highly uncertain, the impact of the pandemic on the company’s results is difficult to predict," the firm said.


Tiger, however, said the choice of verticals the company made as part of a strategic exercise in 2013 has held it in good stead during the pandemic. These include banking, both consumer and commercial, insurance, life sciences and health care, consumer goods (retail, particularly non-luxury), non-discretionary segment of staples, food, grocery, beverages, hi-tech, and manufacturing and services.


"We don't have a very big presence in travel or hospitality or energy or oil and gas or utilities. Our exposure to what we call the harder hit industries is less than 15 per cent so that has helped us. Going forward, that's the way it is going to play out," Tiger said.


The CEO did not rule out merger and acquisition activity, and said it would be a strategic decision with some conversations playing out differently than usual because of the Covid-19 situation.


"We had a target list of capabilities we are looking at, within those we had a target list of companies. We've spoken to a bunch of them for the last couple of years, and we continue to speak to them. In these times, some of those companies may be more interested in an acquisition or being acquired than before. Now, what is the right value, how do you actually do due diligence in these times, those are still hurdles to cross. But acquisition activity in conversations is still strong," said Tiger.


On the question of what the new normal would look like for the BPM industry, Tiger said being able to build digitalisation capability for clients would be a key differentiator for businesses.


Another thing he expects to undergo a change after the pandemic is the way services will be delivered to clients, which would be a mix of onshore, offshore, near shore and now work from home as well.


Focus is also going to shift to building capability for clients faster as digitalisation becomes an imperative across industries.


“After Covid-19 we are well positioned to win. Value is going to be a big conversation with our clients... In the 40 days of Covid-19 lockdown beginning in the world, we took 17 new solutions to the market and eight new digital solutions... We are now working on longer-terms solutions on do we need a delivery footprint (in certain areas). For example, how do we increase our footprint in information security and take that as a new capability for our clients, given that in a virtual environment they need it even more," Tiger said.


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