Against the backdrop of the ongoing Russia-Ukraine conflict, IT major Infosys on April 13 made it clear that it has no plans to do business with Russian clients.
This comes at a time when UK Chancellor of Exchequer Rishi Sunak's wife Akshata Murthy's stake in the company has come under scrutiny in the British Parliament. According to reports, the company, which had operations in Russia, shut down its Moscow centre.
Akshata Murthy, daughter of Infosys founder N Narayana Murty, owns a 0.93 percent stake in the company.
Speaking to media persons on April 13, after announcing the FY22 results, Infosys CEO & MD Salil Parekh said, “We don't do any business with Russian clients today and we have no plans of doing business.”
Given the situation, the company has also started transitioning all of its work from its centres in Russia, where it employs less than 100 employees, to centres outside Russia, Parekh said.
“The work we do is with a small number of global clients in Russia, for which as I just mentioned, we have started to transition. So at this stage, we have no impact within our business from an Infosys perspective,” he added.
On the issues related to Akshata Murthy’s shareholding in the firm, which has come under the scanner of the British government, Parekh said he cannot comment on an individual shareholder.
Russia-Ukraine conflict
The Russia-Ukraine conflict could force IT companies to pause their investments in Eastern Europe, and bring more work instead to India in the near term, according to experts. The raging tensions in the region may also affect business delivery in the short term, resulting in pricing pressure and a slowdown in new deals, these experts added.
After the US, Europe and the UK are the largest markets for IT service providers. This move also comes at a crucial time when the IT services business is booming even as firms face a huge challenge of shortage of talent to cater to the growing business needs.
Expansion to Eastern Europe
Over the last few years, Indian IT companies have been steadily expanding their presence in the region, using it as a nearshore hub to service clients in Europe. The availability of affordable tech talent was a bonus, amid the unprecedented demand for technology services.
According to the data from Everest Group, there are close to 70,000 to 100,000 highly qualified workers in digital engineering and IT skills, who will face disruption. Of this, close to 30,000 are working for third-party service providers across banking and financial services, retail, automobile, and healthcare. About 20,000 are employed in global business service centres in Ukraine, and another 30,000 in Belarus and Russia for third-party services providers and GBS.
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