Infosys, the country’s second-largest software services provider, said that it did not plan to layoff employees following Royal Bank of Scotland’s decision to cancel the project to set up a separate bank in the U.K. An Infosys spokesperson said the employees would be redeployed into other projects.
The Royal Bank of Scotland (RBS) announced this month that it would no longer pursue plans to separate and list a new U.K. standalone bank, Williams & Glyn (W&G), and instead would pursue other options for divesting this business.
“Infosys has been a W&G programme technology partner for consulting, application delivery and testing services, and subsequent to this decision, will carry out an orderly ramp-down of about 3,000 persons, primarily in India, over the next few months,” said Infosys in a statement.
Emkay Global Financial Services said that the ramp-down would roughly amount to a revenue loss of $70 million- $80 million in FY17 and $150 million-$200 million in FY18 for Infosys. “It will shave off 70-80 basis points of revenue growth in FY17. However, there is a likelihood that Infosys gets a one-time termination fee from the client on account of the cancellation,” it said in a statement.
Such cancellation had a lot to do with the sharp fall in deal-making activity post Britain’s exit from the European Union, said Sanjoy Sen, Doctoral Research Scholar, Aston Business School, U.K, reflecting lower business confidence and risk appetite in top executives.