No changes have been observed by Information technology company Infosys in the discretionary spending from the levels seen in January-March quarter.
How Did This Happen?
The Chief Executive Officer and Managing Director of Infosys, Salil Parekh said, “One of the comments we made during the earnings time which holds… generally the discretionary spending approach looks similar at the end of Q4 and start of Q1… and the same thing is visible to us today,” in a media interaction.
According to him, the economic environment has been slowing and as a result, most digital transformation projects have slowed down.
Moving ahead, he said, “Most of what we are seeing today in terms of large programmes are cost, efficiency, automation, and consolidation of partners.”
Focused On Meeting The Constant Currency Revenue Goals
While all these challenges are in motion, India’s second-largest IT company is still confident that they will be meeting its constant currency revenue guidance for FY25, which stands at 1-3 percent.
For the revenue guidance, Parekh said they will relook at the guidance at the end of each quarter.
Adding, “What gives us comfort… one is the large deals… second is that the discretionary spend has remained about the same which has not become worse… and then on financial services that we saw a small better movement, and finally Gen AI where we have completely transformed from the company”
Furter, the IT major also said it is working on 200 generative AI (Gen AI) projects, and as many as six out of eight Infosys employees are getting trained in different aspects of generative AI.
Besides this, the company is actively training six out of every eight employees in Artificial Intelligence (AI) and Gen AI across various levels, to seize the substantial opportunities presented by this nascent technology, said the CEO.
The Bengaluru-based company has developed a “very specific way” to cater to large clientele for captive use of Gen AI.
According to Parekh, for Gen AI to work well within a large organization, data is the key along with cloud adoption.
Adding, “We are now through our digital move over the last few very strong on both cloud and data and that’s helping us as we connect with our clients.”
On the subject of the potential threat of job losses due to AI, Infosys responded saying the company is opening up newer areas where the technology can be deployed.
It has already helped in productivity, time-to-market, and cheap cost.
Parekh added, “At this stage, given it’s a small size within our business we don’t see a big change. We see hiring come back as the economic environment improves and spending on digital transformation picks up.”
A couple of quarters ago, it was a totally different story as Infosys was more on proof-of-concept.
But now, the picture has changed as now the IT service provider is working on actual projects with clients.
