IT major Infosys loses $1.5 billion contract from global customer

Infosys on Saturday announced that a global client has terminated a $1.5 billion deal. 

In September this year, India’s second-largest IT services company, Infosys had announced the signing of a $1.5 billion deal with a global company (which they had not named) to provide enhanced digital experience along with modernization and business operations services, leveraging Infosys platforms and AI solutions. The deal was for a 15-year duration.

In a filing on the exchanges, Infosys said, “The global company has now elected to terminate the Memorandum of Understanding and the parties will not be pursuing the Master Agreement.” 

“This is in continuation to the disclosure made by Infosys vide letter dated September 14, 2023, titled “Company update” with respect to a Memorandum of Understanding with a global company which was subject to parties entering into a Master Agreement.”

The reason for the cancellation of the deal has not been mentioned in the filings. 

Last week, Infosys announced that it had won a five-year deal from auto parts distributor LKQ Europe.

Its other recent large deals include a $1.64 billion deal with London-based Liberty Global for five years.

The cancellation of the deal highlights the uncertain economic condition in the global economy, which has impacted the IT sector’s performance.

The total contract value that Infosys signed in Q2 FY24 was $7.7 billion. Though the TCVs of all the major IT firms have been growing well, the transformation into strong revenue growth was not evident.

Earlier this year, Tata Consultancy Services (TCS) also announced that Transamerica, an insurance player has terminated a $2 billion deal. The deal was signed in 2018 and TCS had worked on the deal for five-and-a-half years.

First Published: Dec 23 2023 | 9:27 PMIST