HCL sacrificed some profit for strong future in Europe

Indian service provider HCL Technologies disclosed that it is prepared to live with lower profits as it invests for an upturn.

The company was the...

Indian service provider HCL Technologies disclosed that it is prepared to live with lower profits as it invests for an upturn.

The company was the only top-four Indian supplier to report a drop in profits in the last quarter as it stepped-up its investment in Europe.

HCL European president Rajeev Sawhney said the company has spent money during the recession and that this will yield benefits when the economy picks up.

Revenues in Europe in the latest quarter increased 38% compared to the previous year and 5.1% compared with the previous quarter.

HCL has established in-country teams in European countries where they did not exist in the past, said Sawhney.

"All of last year we invested in these teams which have now been in place for about a year."

HCL has established a team in the Nordic region, one to cover Germany, Austria and Germany, another for France, a team to look after the Benelux, as well as an Italian outfit.

This has helped HCL overcome cultural and language problems and developed intimacy with customers, he said.

About 85% of the people employed are citizens of that country. "The whole point is these are local people."

The company now has about 8,000 people in Europe, with 85% local. It has 58,000 workers globally.

Duncan Aitchinson, head of Europe at sourcing consultancy TPI, said the best way to build a solid European business is by establishing local presences. "Outsourcing service providers that have strong presences in particular European countries tend to do well in those companies."

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