Telstra signs major multi-year ICT deal with Infosys

21 May 2024 Consultancy.com.au 2 min. read

Telstra has signed a multi-year agreement with Infosys, hot on the heels of a similar deal with fellow ICT consulting giant Cognizant.

According to a release, Infosys will support Telstra with accelerating its “software engineering and IT transformation journey and further enhance its customer experience,” with a focus on artificial intelligence and cloud computing.

The specifics of the deal however were similarly vague to the recent Cognizant announcement, with the news coming shortly after Cognizant Telstra revealed plans to axe a further 2,800 local jobs – or close to one tenth of its workforce – by the end of the year.

Telstra signs major multi-year ICT deal with Infosys

“Consumers around the world have significantly increased their expectations when it comes to the seamless, digital delivery of their products and services,” stated Telstra products & tech leader Kim Krogh Andersen. “As we approach the tipping point of genAI and an avalanche of digital adoption, strategic partnerships with global leaders such as Infosys are critical to support our shared ambitions for digital leadership.”

Telstra chief executive Vicki Brady – who started her career at KPMG – has now stated that the job cuts are a necessary part of resetting the telco’s Enterprise business (which houses its consulting division Telstra Purple), and would help realise $350 million in operational cost reductions as part of its McKinsey-informed T25 strategy. Telstra Purple recently welcomed cloud consultancy Versent, bought for $267 million.

“Telstra’s ongoing investment in infrastructure, technology, innovation and service for our customers drives growth and underpins Australia’s digital economy, contributing to the prosperity of the nation,” Brady said. “This is occurring within a dynamic environment, with an evolving landscape, rapid advances in technology, changing customer needs, and the ongoing inflationary pressures facing all businesses.”

While the unions have cried foul about the apparent blind-siding prior to Telstra’s ASX announcement, it’s difficult not to see the writing on the wall in correlation to the back-to-back long-term partnership agreements with Cognizant and Infosys, which both have the majority of their workforces based in India. Telstra however has denied the cuts are related to increased AI or its customer service team.

For Infosys’ part, global CEO Salil Parekh stated: “Infosys has a long-standing association with Telstra supporting its many evolutions over the last two decades (including in the area of CX robotic process automation), and we’re excited to work with them on the next chapter of this journey. By leveraging Infosys Cobalt (cloud) and Topaz (AI), we can help Telstra accelerate its strategy for growth.”