Severe setback to Infosys, foreign client terminates $1.5bn MoU

New Delhi: IT services firm Infosys has said that a global company has decided to terminate a multi-year contract worth USD 1.5 billion with it.

On September 14, 2023, Infosys announced a pact with a global company to offer enhanced digital experiences alongside modernisation and business operations services leveraging Infosys platforms and AI (Artificial Intelligence) solutions.

In a BSE filing on Saturday, Infosys said the global company has now elected to terminate the Memorandum of Understanding (MoU) and the parties will not be pursuing the master agreement."

Infosys also said the stock market intimation was in continuation to a disclosure made on September 14, 2023, with respect to an MoU with the global company which was subject to parties entering into a master agreement.

On the said date, Infosys informed BSE that it entered into an MoU with the global company to provide enhanced digital experiences, along with modernisation and business operations services, leveraging Infosys platforms and AI solutions.

"The total client target spend over 15 years is estimated at USD 1.5 billion," it had said.

This was subject to parties entering into a Master Agreement, Infosys had added.

The deal loss comes at a time when global uncertainties and macro headwinds have challenged IT and tech companies worldwide. In fact, the UK economy has contracted in the third quarter according to official estimates, and experts have cautioned that Britain could already be at risk of a recession.