Bangalore Indian software services companies are shifting their limited operations from Russia over geopolitical tensions triggered by the invasion of Ukraine, while helping customers maintain business continuity by relocating work to other locations.
Infosys, which ran a small operation in Russia, is shifting work to locations outside the country. “We have less than 100 employees in Russia. We do not work with any Russian customers to date and have no plans to move forward,” said Salil Parekh, chief executive and managing director of Infosys.
Tata Consultancy Services Limited (TCS) said that it does not have operations in Russia and Ukraine and, therefore, has no direct impact. “However, we are very engaged in this process to see how we can help our clients in their BCP (Business Continuity Plan) operations (by the Russia-Ukraine conflict). TCS Chief Executive and Managing Director Rajesh We are also trying to help our customers, who are trying to differentiate their operations and supply chain, Gopinathan said.
TCS sees an opportunity to expand its presence in Eastern Europe where it has a moderate presence with around 5,000 employees. “Many people have moved from Ukraine to countries like Poland and Hungary. So, people are demanding jobs which gives us an opportunity to increase local hiring there,” Gopinathan said.
Analysts agreed that Indian IT companies may have an opportunity to tap into the displaced talent pool. Sanchit Vir Gogia, chief analyst and chief executive of Greyhound Research, said, “The Ukrainians are displaced due to the civil war and may not be immediately available to work for clients, so this will work in favor of Indian IT services firms. “
He said the war has directly affected key industries such as oil and gas, manufacturing and semiconductors, and therefore Indian IT services companies exposed to these industries will be affected by uncertainty in the supply chain and associated pricing.
“Indian IT companies can benefit from additional contracts from Europe and other parts of the world, which till date have been heavily dependent on Ukraine for IT support and development work… realized in several deals that are currently being negotiated. or is under technical consideration. This will have an impact on the results of the coming quarters.”
Experts believe that the demand for technology services will remain strong despite geopolitical tensions.
“We do not expect demand for technology services to cool in the short to medium term due to war. Digital transformation halted by large global 2000 customers is a secular trend and pipeline and revenue growth for most IT and digital engineering service providers However, some moderation in growth is expected in 2-4 quarters as fears related to recession and inflation become more prominent,” said Nitish Mittal, Partner, Europe Technology Practice, Everest Group.