The cancellation of the deal highlights the uncertain economic situation in the global economy, which has impacted the performance of the IT sector.
IT sector giant Infosys has suffered a shock of $ 1.5 billion. The company reported this on Saturday, December 23. However, the IT giant did not reveal the name of the foreign company that canceled the deal.
In September this year, Infosys, India’s second-largest IT services company, announced the signing of a $1.5 billion deal with a global company (which he did not name) to provide a better digital experience with modernisation and business operations services while leveraging the Infosys platform and AI solutions. The deal was for a period of 15 years.
The reason for canceling the deal is not clear
In an exchange filing, Infosys said, “The global company has now decided to terminate the Memorandum of Understanding (MoU) and both the companies will not abide by the master agreement.” ”
“This is in continuation of the disclosures made by Infosys through a letter dated September 14, 2023 titled “Company Update” in respect of a Memorandum of Understanding (MoU) with a global company that was subject to the parties entering into a master agreement. However, the filing did not mention the reason for canceling the deal.
Deal cancellation signals uncertain economic situation in global economy
Last week, Infosys announced that it has secured a five-year deal from auto parts distributor LKQ Europe. Its other recent big deals include a five-year, $1.64 billion deal with London-based Liberty Global.
The cancellation of the deal highlights the uncertain economic situation in the global economy, which has impacted the performance of the IT sector.
The total contract signed by Infosys in the second quarter of fiscal year 2024 was valued at $ 7.7 billion. Although the TCVs of all major IT companies are growing well, the change in strong revenue growth was not evident.
Earlier this year, Tata Consultancy Services (TCS) also announced that insurance company Transamerica had cancelled a $2 billion deal. The deal was signed in 2018 and TCS worked on the deal for five-and-a-half years.