Mumbai: Mumbai-based business process outsourcing or BPO firm Firstsource Solutions Ltd posted a 13% decline in profit in the three months ended March from a year earlier, while revenue rose 7.3%. Profit dropped to Rs35.6crore from Rs40.8 crore.

Containing attrition: Firstsource chief executive Ananda Mukherji.

In the fiscal ended March, profit more than tripled to Rs160 crore from Rs50.6 crore. One-off items such as foreign exchange and foreign currency convertible bond related losses had resulted in a low profit base last year.

For the year, revenue rose 12.7% to Rs1,970crore from Rs1,749 crore.

Firstsource, which operates call centres for telecom operators in India, saw declining call volumes as a result of the flux in an industry being roiled by an intense tariff war. In response to the drop in call volumes, the company had to downsize operations during the quarter, management said.

The BPO continues to grapple with high attrition levels, currently at 43%, at its operations in India and Philippines —which the company refers to as its offshore base—and 34.5% at its US and UK operations.

For the Indian operations alone, attrition was at 68% at the end of December 2009, but the latest quarter’s number was not disclosed by the company as it was “not relevant in the context of significant downsizing due to lower volumes."

Firstsource chief executive Ananda Mukerji acknowledged that the attrition level is higher than the industry average and that the management is working on containing this. Mukerji will step down as chief executive in July.

Targeted compensation measures to retain staff and better employee engagement are some of the measures that the company is planning to bring down attrition levels.

Firstsource will also give out an 8-10% pay hike for domestic staff and a 3-4% hike for its foreign staff. Firstsource had 24,860 employees as of 31 March compared to 21,570 as of the year earlier.

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