With clients rethinking projects, Infosys flags risks

Bengaluru: Some clients of InfosysNSE 1.88 % have terminated projects or reduced demand for its services amid the Covid-19 induced economic crisis, which could impact its profitability in the year ahead, the Bengaluru-based company said in a filing.

The IT services provider highlighted that the pandemic could pose a major risk going forward as key clients across the United States, Europe and other prominent markets cut costs due to the prolonged economic impact of the outbreak.

“Many of our clients’ business operations have been negatively impacted due to the economic downturn – resulting in postponement, termination, suspension of some ongoing projects with us and/or reduced demand for our services and solutions,” the company said in a filing with the US Securities and Exchange Commission. “Our profitability may be negatively impacted if we are unable to eliminate fixed or committed costs in line with reduced demand,” Infosys added.