Kenya’s BPO sector faces bleak future as foreign deals dip

Mergers, Acquisitions and Financial Results

Hopes that the Government bandwidth subsidy to call centres would spur growth and increase employment in the sector could be dampened by the global financial crisis. At least two business process outsourcing firms with the largest capacity in the country and also among those listed to benefit from the subsidy say that some of their US-based clients have either cancelled their contracts or scaled down their operations.

Kencall employs more than 650 people while Call Centre Africa has 400 workers. Although last October some BPO and call centre operators said that the country could take advantage of the global crunch to develop the sector, it is now turning out to be in the contrary.

With most people not buying in the US, companies are getting smaller thus do not need to outsource their services. Of key importance to Obama administration is to bring back some of those jobs to the US as the unemployment rates soar with the closure of companies.

Nick Nesbitt, the chief executive of Kencall, says the firm has lost two clients, who at one point last year contributed to 60 per cent of the firm’s total revenue, while Wallace Gichoho of Call Centre Africa says one company has cancelled its contract and another one has reduced its operations to 20 per cent.

The two firms are now re-positioning their marketing strategies in order to woo new clients as the global crunch takes toll on their businesses.

Business Daily