NYSE-listed TDCX eyes outsourcing boon amid tech layoffs

From Meta and Alphabet to Amazon and Twitter, tech firms have trimmed their headcount after overhiring amid the Covid-19 pandemic and in anticipation of macroeconomic uncertainty ahead.

But in Singapore, a business process outsourcing (BPO) firm has found a silver lining through it all.

TDCX listed on the New York Stock Exchange in September 2021. / Photo credit: TDCX
The New York Stock Exchange welcomes TDCX Inc. (NYSE: TDCX) ), today, Wednesday, October 6th, 2021, in celebration of its recent listing. To honor the occasion, Laurent Junique, CEO, joined by Chris Taylor, NYSE Vice President and Head of Listings and Services, rings The Closing Bell®.
Photo Credit: NYSE

Downsizing is “creating an opportunity for outsourcing,” Laurent Junique, founder and CEO of New York-listed TDCX, tells Tech in Asia.

As rising interest rates raise the cost of capital, choosing to outsource work gives companies the flexibility to augment their current operations “without the commitment” of investing in new offices and making new hires, Junique explains.

Expected revenue growth of up to 21%

Meta and Airbnb are among TDCX’s clients across sectors including fintech, gaming, social media, and ecommerce. Its CEO notes that 93% of the company’s customers hail from the “new economy,” referring to high-growth tech firms with “employee-lite, nimble business models.”

Layoffs across the tech sector have affected over 6,000 employees in Southeast Asia since July 2022, according to Tech in Asia data. Consequently, the pool of talent available for hire has expanded.

As of the third quarter last year, none of TDCX’s employees have been affected by job cuts, Junique says. He attributes this to the BPO firm’s focus on “mission-critical” functions such as customer experience and digital marketing that generate revenue for its clients.

You have to wonder whether we are looking for them, or they’re looking for us.

But given how many large-scale layoffs, including Meta’s 13% headcount reduction, began only in Q4 of last year, the full impact of these measures may only be reflected in TDCX’s financials further down the line.

The company, however, has reiterated its guidance for 2022 in November and is expecting a revenue of between S$655 million to S$670 million (US$499 million to US$510 million). This would represent a year-on-year growth of between 18% to 21%.

A majority of this growth comes from TDCX’s omnichannel customer experience function, which involves providing multilingual support across various sales touchpoints.

Though 2022 was meant to be a “slowdown year,” Junique says it was still quite “an exceptional year” for the company.

According to the firm’s unaudited financial results, revenue in Q3 2022 grew by 16.1% to US$120.5 million year on year. The company also reported a slight 2.3% boost in profit to US$21.6 million during the same period.

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