Infosys RBS contract loss will impact 3,000 employees over six months

The Royal Bank of Scotland (RBS) has cancelled a major contract that will impact as many as 3,000 of Infosys’s employees and impact revenues by about $40 million over the next six months.

The cancellation came following RBS’s decision to abandon its plan to float a separate standalone UK bank – Williams & Glyn (W&G). RBS had awarded a five-year 300-million euro IT contract to Infosys and IBM for W&G. The major portion of that, may be as much as $200 million, was to go to Infosys.

On Saturday, following the RBS announcement, Infosys said in a statement: “Infosys has been a W&G programme technology partner for consulting, application delivery and testing services, and subsequent to this decision (of not creating a separate subsidiary), will carry out an orderly ramp-down of about 3,000 persons, primarily in India, over the next few months.”

Though Infosys did not specify the quantum of impact on revenue, some analysts, who did not want to be named, estimated it at around $40 million for the current year.

“Days before the latest announcement from RBS, Infosys was drawing up a 3-year roadmap for the RBS account and saw the potential to grow the account 15% year-on year,” one source said.

 

SOURCE: PTI