On Saturday, Infosys declared that a $1.5 billion contract had been terminated by a global client.
Infosys, the second-largest IT services company in India, announced in September of this year that it had signed a $1.5 billion deal with an unnamed global company to provide modernization and business operations services, as well as enhanced digital experience, using Infosys platforms and AI solutions.The agreement was for a period of 15 years.
“The global company has now elected to terminate the Memorandum of Understanding and the parties will not be pursuing the Master Agreement,” Infosys stated in a filing on the exchanges.
“This is a follow-up to the disclosure made by Infosys in a letter titled “firm update” dated September 14, 2023, regarding a Memorandum of Understanding with a multinational company that was contingent upon parties entering into a Master Agreement.”
The deal’s cancelation serves as a stark reminder of the unstable state of the world economy, which has affected the performance of the IT industry. Among its other notable recent transactions is a five-year, $1.64 billion agreement with London-based Liberty Global.
In Q2 FY24, Infosys signed contracts worth a total of $7.7 billion. All of the major IT companies’ TCVs have been increasing, but it hasn’t been clear how this expansion has translated into robust revenue growth.
Tata Consultancy Services (TCS) also revealed earlier this year that insurance company Transamerica had canceled a $2 billion contract. TCS spent five and a half years working on the agreement before signing it in 2018.
Not a big deal
Infosys is always a big IT company