in

Infosys sees an opening as clients turn to large firms to cut costs

1588818841_photo.jpg


BENGALURU: Infosys is seeing opportunity in vendor consolidation as clients look to work with a few large IT services companies to save costs during the current economic slowdown brought on by the Covid-19 pandemic, a senior company executive said.

The Bengaluru -based IT giant is also looking to snap up some captives that clients may hive off in the near future.

“Some clients are looking at consolidation. In this crisis, they have had mixed experience of work-from-home from different players. So, they feel, if this lasts 12-18 months, they would want to put their bets on larger players who have done well in transitioning to this new way of working,” Infosys Chief Operating Officer UB Pravin Rao told ET.

Clients want to work with larger players rather than multiple IT vendors and subcontractors because of concerns around cybersecurity and their perceived ability to pull off work from home, he said.

“They are looking at consolidation opportunity if they work with 5-6 players and multiple smaller subcontractors, they can give everything to 2-3 players. Here, they clearly expect cost saving by doing it,” Rao said.

Infosys has also been approached by many clients to take over their non-core IT captive centres as the pandemic forces them to conserve cash and monetise some assets.

“Some of them are talking about captives. Some people captives are strategic and doing well but others may not think this is a right investment at this stage,” Rao said.

“We are having a few conversations; some, we have approached proactively but many clients have broached the subject.”

He said closing such deals will take time and some clients may seek out buyers through a Request for Proposal (RFP) route to hive off captives.

He said the general consensus is that that the health crisis would continue for 12-24 months unless the world develops a vaccine soon.

“The only way out is to learn to live with it. You can’t get into a permanent lockdown,” Rao said.

“Given the new reality, the workplace will be different. In terms of demand, we have to wait and watch. In the short to medium term, we have levers, given that we have a good balance sheet.”

Infosys has also taken many cost-cutting measures such as halting salary hikes and minimal recruitment, he said.



Source link

Written by sortiwa

Mutations in SARS-CoV-2 offer insights into virus evolution — ScienceDaily

‘Risk perception’ among UK population greater than in nine other countries surveyed for latest research — ScienceDaily