The chief executive of Infosys, one of the world’s largest IT companies, said he is confident about the UK market after years of uncertainty in the run-up to Brexit.
Salil Parekh, who took over the role in 2018, said Infosys plans to expand in the UK and Europe now that Britain and the EU have agreed a trade deal. “The uncertainty is behind us,” he said.
Infosys, which had revenues of $12.8bn last year, manages IT systems for many of the world’s biggest companies and in recent years has shifted focus to digital services such as cloud computing.
Its UK clients include Vodafone, BT and energy supplier Eon. Last month it signed a deal with German carmaker Daimler to overhaul its IT systems.
The years of uncertainty about trading relations between Britain and the EU after Brexit made it harder for Infosys and other IT groups such as Tata Consultancy Services to help multinational clients reshape their businesses.
Mohit Joshi, president of Infosys, said in 2019 that customers had more worries about Brexit than about the “millennium bug” in 2000.
Infosys is now among a number of Indian companies looking to capitalise on the new trading arrangements to expand in the UK. Mr Parekh said clients in financial services and other sectors with cross-border operations now have new opportunities and problems to deal with.
“Given we’ve passed January 1 . . . we see that businesses are looking ahead to try to develop their own strategic thinking on what best way they can leverage the new environment.”
Europe and the UK accounted for a quarter of Infosys revenues last year and it has more than 16,000 employees in the region.
Infosys has longstanding links with the UK. It was founded in 1981 and first entered the British market in 1995. Akshata Murthy, the daughter of its retired billionaire founder Narayana Murthy, is married to UK chancellor Rishi Sunak.
But some industry veterans are sceptical that Brexit will be a boon for Indian IT companies in the UK in the long term.
“As far as Brexit is concerned, whether it’s Infosys or anybody else, I think they’re being too sanguine,” said Sid Pai, founder of venture fund Siana Capital and a longtime industry executive. “They’ll see a short-term pop, but I don’t think they’ll see a long-term secular trend of massive business coming out of the UK just because a deal is signed.”
While Infosys and other Indian IT companies for decades thrived on work that was outsourced from Europe and the US — its largest market — to India, the tightening of immigration rules has forced them to invest more in local hiring.
The lockdowns and travel restrictions during the pandemic have accelerated that trend, with the US suspending the issuance of H-1B and other work visas in June.
Mr Parekh said less than half of the company’s US employees are now on work visas. “It’s not fully clear to me how the [visa] situation will evolve,” he said. “We have the ability to build a business model . . . that’s not dependent simply on what we had in the past.”
Infosys has ridden strong demand for corporate IT support and upgrades since the pandemic began, with businesses forced to make changes to adapt to remote working.
The company agreed client deals worth $7.1bn in the quarter ended December, its largest ever total, and drew just over half of its revenues from its digital business for the first time.
Mr Parekh added that new waves of Covid-19 infections and lockdowns in the UK, Europe and elsewhere had not affected business because clients were now more prepared for the upheaval.
“The business [is] in as robust a state as it has ever been in,” he said.