Infosys eyes acquisitions; CEO Salil Parekh says ‘no layoffs due to AI focus’. Full report here

Infosys Ltd. is looking to acquire more companies operating in data analytics and software-as-a-service (SaaS), as generative artificial intelligence (AI) is fueling clients’ strong interest, reported PTI, quoting Salil Parekh, the chief executive officer (CEO) at Infosys.

The IT giant head also said that he does not foresee any layoff in the company on this new-age technology’s (AI) account, reported the news agency. The company may look at some areas within Europe or the United States, according to the executive quoted in the report.

The news agency asked about more acquisitions that could be of scale matching in the tech industry, which came with a price tag of 450 million euros. “Absolutely, I think those would be the size that we will look at in terms of scale, and given our structure we could do a few of those,” said Parekh in response, as per the report.

In January 2024, Infosys announced a definitive agreement to acquire 100 per cent of InSemi Technology Services, an Indian chip-designing company for nearly ₹280 crore, as per the report.

Infosys, in April 2024, acquired a 100 per cent stake in in-Tech Holding for nearly 450 million euros. The company deals with providing engineering R&D servicesand is headquartered in Germany, according to the report.

“…we have very good business in engineering services already within Infosys and then we did those two acquisitions, both of them in engineering services, one on semiconductor side and one on the automotive side… very strong businesses, and we feel quite good about expanding that footprint,” said Parekh, according to the news agency. As the company evaluates several companies and eyes and acquisition, as per the report.

“…we have a good balance sheet and good cash generation and now we are quite comfortable with the integration of acquisition in different areas. “We have done engineering services, we will look at other areas… for example data analytics… may look at SAAS (software as a service) areas, and maybe at some other geographies in Europe, maybe the US as well,” said the Infosys head highlighting the dependence of factors like strategic synergies, financial cost, cultural fit and integration aspects in the acquisition deal, as per the report.

Parekh also highlighted that it is tough to put a timeline on the ongoing deal discussions when asked about closing the year with more acquisitions, as per the report.

Parekh put his faith in the increasing GenAI adoption as companies benefits and the business outcomes from it.

“So we think this will accelerate as time goes on but we will wait-and-watch how it develops. It is a bit like, some years ago we started with digital or with cloud… these things start-off in a certain way… and then we see what benefits clients are getting. If they see benefits are substantial, more and more adoption will happen,” said Parekh.

Infosys disclosed earlier this year that the company is working on 225 Generative AI client programs and more than 2.5 lakh employees are being trained in generative AI, according to the report.