After failing to generate enough revenue from its Business Process Outsourcing (BPO) business, IT services firm Mastek has decided to scrap the business, reports Business Line.

R S Desikan, group chief financial officer of Mastek, said that BPO did not fit into Mastek’s business model of driving non-linear growth by increasing revenue per employee. In the past two years, the company has given u on pitching for the renewal of back-office contracts, and has significantly reduced BPO staff from 142 to 20. Desikan said, "Though our BPO practice is not loss-making at all, it is derogatory to our margins. It does not give us the scope to increase average revenues per employee to the level we want to take it to."

With the company’s quarterly earnings from BPO operations continuing to fall, Mastek is expected to be out of the BPO business completely by the end of the current fiscal year. Desikan said, "Most of the employees of our BPO practice were absorbed into our internal operations. Several employees left on their own." X