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

Infosys Ltd. is looking to acquire more companies in the data analytics and software as a service (SaaS) space as generative artificial intelligence (AI) is seeing strong customer interest, news agency PTI reported, quoting Salil Parekh, chief executive officer (CEO) of Infosys.

The IT giant’s boss also said he does not anticipate any layoffs at the company due to this new technology (AI), the news agency reported. The company may look at some areas in Europe or the United States, according to the executive quoted in the report.

The news agency asked about more acquisitions that could be scalable in the technology industry, which involved a price tag of €450 million. “Definitely, I think that would be the size that we would look at in terms of scale, and given our structure, we could do a few of those,” Parekh said in response, according to the report.

In January 2024, Infosys announced a definitive agreement to acquire 100% of the shares of InSemi Technology Services, an Indian integrated circuit design company, for almost ₹280 crore, as per the report.

Infosys acquired 100% of in-Tech Holding for nearly 450 million euros in April 2024. The company is engaged in providing R&D engineering services and is headquartered in Germany, according to the report.

“…we already have a very good engineering services business at Infosys and then we made these two acquisitions, both in engineering services, one on the semiconductor side and one on the automotive side…very strong businesses and we feel pretty good about expanding that footprint,” Parekh said, according to the news agency. Because the company is evaluating a few companies and looking at acquisitions, according to the report.

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

As per the report, Parekh also stressed that it was difficult to put a timeline on the ongoing deal talks when asked about closing the year with more acquisitions.

Parekh believes in the growing adoption of GenAI which will benefit companies and bring them business benefits.

“So we think it will accelerate over time, but we’ll wait and see how it develops. It’s kind of like when we started a few years ago with digital or cloud… those things start in a way… and then we see what the benefits are to customers. If they see the benefits are significant, then we’ll see more and more adoption,” Parekh said.

According to the report, Infosys disclosed earlier this year that it is working on 225 generative AI client programs and that more than 2.5 million employees are currently being trained in generative AI.