The Outsourcing Week in Review: Tuesday, March 28, 2023

Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

Welcome back to Inside Outsourcing! We have so much outsourcing news to unpack this week that we can’t think of a better intro to ease you in. So, let’s just get into it!

The banking crisis in the United States (U.S.) and Europe could allow Indian IT firms to acquire captive technology units of banking and financial firms. According to consultancy firm HfS Research, the recent economic events could push more companies to outsource their operations and IT support. Stock broker Kotak Securities added that opportunities in application rationalization, higher offshoring, captive carve-outs, enabling automation, and vendor consolidation could increase in the following months. Over the last few weeks, the U.S. witnessed its second and third largest banking failures in history, while Swiss bank UBS had to buy out a failing Credit Suisse for over US$2 billion.

It’s not just the banking crisis that is driving outsourcing forward. Restrictive immigration policies may mean that nine out of ten U.S. companies (93%) are expected to turn to nearshoring or offshoring. A poll by immigration services provider Envoy Global revealed that 86% of American companies had already hired outsourced staff due to visa-related hurdles. The surveyed companies also shared they relocated employees to Canada, Mexico, the United Kingdom, Germany, and Australia. Meanwhile, other companies are moving to contract workers to cope with the changing global economy. In its 2023 Future of Recruiting Report, employment-focused platform LinkedIn said that job posts for contractor roles in the U.S. increased by 26% year-on-year, while full-time roles only grew by six per cent. LinkedIn stated that businesses “need to be more nimble and responsive” to sudden shifts in the market as economic uncertainty continues.

While there’s plenty of good news for the outsourcing industry, some bad news was announced last week.

Professional services firm Accenture will lay off 19,000 employees over the next 18 months as part of its cost-cutting efforts. Accenture CEO Julie Sweet said they are going after structural costs to ensure they are in a better position amid a challenging economic environment. A filing with the United States Securities and Exchange Commission revealed that the company expects to incur US$1.5 billion in costs due to the downsizing, including US$1.2 billion directly related to the layoffs. The reduction represents only 2.5% of Accenture’s workforce, so the cuts are far from dramatic.

India’s youth are reportedly turning to gigs and scam call centers to find work. According to Urvashi Aneja, director of Digital Futures Lab, these workers are at the “bottom of the AI value chain” with no prospect of higher wages or upskilling. Rikta Krishnaswamy, the coordinator of the All India Gig Workers’ Union, added that gig workers earn low wages and have few protections within the country. India has one of the largest and fastest-growing gig economies in the world. Government think-tank Niti Aayog said the gig economy could expand to 24 million workers by 2029-2030.

The Meta-Majorel content moderation partnership was temporarily blocked in Kenya after an illegal termination and blacklisting case surfaced. This decision came after 43 moderators claimed that Sama, Meta’s outgoing content moderation partner, laid off 260 workers without a 30-day termination notice. The complainants added that they were blacklisted from applying in Majorel based on their previous work experience “at the 3rd Respondent’s (Sama) facility.” Sama insists that they had observed the Kenyan law said they had observed the Kenyan law and communicated the terminations in a town hall and through email and notification letters.

In other news, several M&A deals were closed last week. Let’s look back on the major ones.

Wealth management software provider BetaNXT is exploring investor communications by acquiring Mediant Communications. According to BetaNXT Chairman and CEO Stephen Daffron, adding Mediant to their platform enhances their ability to be a trusted partner for companies looking to integrate communications into their wealth management platforms. Backed by Clearlake Capital and Motive Partners, BetaNXT assists over 50 million retail accounts and has over US$6 trillion of assets on the platform. Meanwhile, audit and advisory service provider Azets is entering the Irish market following its acquisition of Baker Tilly Ireland. In a press release, Azets said they chose Ireland for its thriving small and medium-sized enterprises (SME) community and strong business ties with the United Kingdom (UK), Europe, and North America. With immediate effect, Baker Tilly Ireland is now rebranded as Azets Ireland.

IT solutions provider First Focus acquired eStorm to improve its managed services capabilities, focusing on the education sector and Apple products. First Focus CEO Ross Sardi said this deal adds expertise to the firm, allowing them to build their services and be the “#1 MSP across SMB and midmarket. All eStorm staff will be retained while its CEO, Jason La Macchia, will continue to work with First Focus. Similarly, IT company TIS will acquire 76,000 shares of financial accounting provider Nihon ICS as part of their service expansion efforts. TIS would turn Nihon into a consolidated subsidiary, allowing the former to secure the company’s business model and client base. The transaction will be completed on April 06, 2023.

Another tech provider, Hydsoft Technology, will acquire digital systems provider Meyacom to enhance its financial IT services. Hydrosoft said this deal would help them enter the insurance IT service industry and obtain more customers and business opportunities. This is Hydrosoft’s third Chinese M&A deal — following its acquisitions of Baishuo Tongxing Keji and Youxian Gongsi — in under six months.

Lastly, global tech firm S4Digital completed its acquisition of outsourcing company HR Ways. In a statement, the merged organizations will work to address the global talent shortage through new products and services. Both firms are global, with S4Digital serving clients in Europe, Africa, South America, and India. Women-led HR Ways, meanwhile, has clients across Canada, Australia, North America, the Middle East, and Asia.

Another women-led firm is making waves in the industry! Tech-based legal process outsourcing (LPO) firm Velox Partners opened its second office in Colombo, Sri Lanka. According to the company, this expansion marks a new beginning in its local and global growth. Velox started its operations in January 2020 — before the onset of the pandemic — by providing back-office legal services to law firms across continents.
Industry partnerships are also expanding!

First off, cloud-based software firm Five9 extended its collaboration with the AI platform Invoca Presense. Using the combined capabilities of Five9 Intelligent CX Platform and Invoca’s conversation intelligence technology, Invoca Presense can give contact center agents access to a caller’s digital journey before the call. Five 9 added that the solution helps agents provide customized advice to each caller. Customer engagement firm Verita is also collaborating with Eventus Solutions Group. This partnership with Eventus — a Tech Mahindra subsidiary — comes amid a massive consumer shift to digital platforms. Tech Mahindra SVP Bharath Vasudevan said that this partnership would enable organizations to create differentiated customer experiences, improve engagement, and transform digital customer experience in key markets.

Talent solution firm Eclaro was selected as the Staffing Partner of the Year and Leading Diversity Partner in nextSource’s 2022 Keystone Recognition Program. Eclaro SVP for Strategic Accounts Kate McCabe said these honors recognize the firm’s “best in class” global team and processes as best in class. McCabe also promised that the firm would continue innovating and impressing its clients with its North America and Philippine workforce. Not to be outdone, outsourcing firm Wing Assistant was included in Forbes’ 2023 Best Startup Employers in America list. In a statement, the firm expressed happiness in being included in the list and thanked its global workforce for supporting its clients daily. “Kudos to our team and the many Wing Assistants who go above and beyond in helping our clients take control of their day,” the agency added.

A major rebrand has happened in the industry in the past few weeks. Sitel Group, one of the biggest global customer experience (CX) solutions providers, changed its name to Foundever following its major acquisition of SYKES. In an announcement, the firm stated that this new identity amplifies its commitment to be the CX team behind leading global brands. With the expertise of its 170,000 employees, Foundever will continue servicing over 750 companies across the Americas, Asia Pacific, Africa, and Europe.

Are you feeling brand new?

Tuesday, March 28, 2023

NEWS THIS WEEK

27 March 2023

• TechMaven to enhance real estate platform Sharestates –  read article… 
• Verint partners with Eventus for customer engagement solutions –  read article…
• Employers to hire more contract workers, says LinkedIn  –  read article…
• ibex’s CX solutions help transform utilities marketplace – read article…
• Five9 expands partnership with Invoca – read article…

24 March 2023

• Stefanini Group acquires Safeway to bolster cybersecurity platform –  read article… 
• ADEC Innovations acquires Kedge, Southern Ocean Carbon Company – read article…
• Accenture to cut 19K jobs  –  read article…
• India to benefit from U.S., EU banking crisis  – read article…
• Sitel rebrands to Foundever after acquiring SYKES  – read article…

23 March 2023

• S4Digital acquires women-led HR Ways –  read article… 
• Hydsoft boosts financial IT arm with Meyacom acquisition –  read article…
• TTEC among Mexico’s Best Workplaces for 5th consecutive year  –  read article…
• Meta-Majorel partnership blocked by Kenyan court  – read article…

22 March 2023

• TIS to absorb Nihon ICS as subsidiary – read article…
• First Focus acquires eStorm – read article…
• India’s youth turning to gigs, scam call centers – read article…
• 9 in 10 U.S. firms may offshore amid immigration barriers  – read article…

21 March 2023

• Azets enters Irish market after acquiring Baker Tilly Ireland  – read article…
• BetaNXT acquires Mediant – read article…
• Eclaro hailed as Staffing Partner of the Year  – read article…
• Sri Lankan LPO expands operations – read article…

Read more Inside Outsourcing Newsletters here:

1. The Outsourcing Week in Review: March 23, 2023
2. The Outsourcing Week in Review: March 30, 2023