Capgemini deal won't result in job loss: IGATE CFO

After Capgemini acquired IGATE in April this year, it was speculated that Vemuri would leave the company

As the Capgemini-IGATE deal is inching towards closure, IGATE has said none of its top executives, including president and chief executive Ashok Vemuri, executive vice-president and chief financial officer Sujit Sircar and human resources head Srinivas Kandula will leave the entity.

The merger will not result in any staff layoff either, it added.

In an exclusive interview with Business Standard, Sircar said the employees and senior management are fully charged up to be part of a much bigger entity with an expanded bouquet of services leveraging Capgemini’s strength in Europe as well as in consulting services.

After the French IT services and consulting company announced in April to acquire Igate for $4 billion, it was speculated that Vemuri would leave once the integration was over. Vemuri, a former top executive at Infosys, joined Igate in September 2013 when the then president and CEO Phaneesh Murthy quit the US-headquartered firm unceremoniously after he was found to be having a relationship with an employee.

“All this speculation that people will be taking money and walking away is absolutely absurd. On behalf of the entire management, let me tell you that we are very much going to be part of this great exciting journey. That is ultimately the goal of all of us to take this company to take to the next level along with Capgemini,” said Sircar.

Sircar, who was part of the leadership team that was responsible for the smooth integration of Patni Computer Systems which Igate acquired in 2011, said the integration of Igate with Capgemini would be smooth. He said the major part of the capabilities that IGATE is bringing to the table is complementary with very little overlapping.

“People leave their jobs only when conflicts happen; but here it is complementary to each other, and there is not much overlap. The same thing happened when Patni got merged with Igate; forget about losing jobs, there was so much of heavy recruitment. In this case also, there will be a big impact and that will be only positive,” he said.

“At the end of the day, when you are valued at $4 billion, our valuation is all about employees, solutions and customers. All these will be protected and there will immense opportunities in the bigger arena to play.”

With regard to the completion of the transaction, the Igate CFO said both the companies are on the fast-track in terms of the deal closure, which is expected to close in the early third quarter (July-September) of 2015. This would be followed by de-listing of Igate from Nasdaq, which he said was not expected to take much time as “unlike in India, it (de-listing) is not a complicated process in the US”.

In run-up to the merger, it is business as usual for IGATE. The deal pipeline before the company was healthy, said Sircar, adding that being a part of Capgemini would only broaden the horizon to have a much deeper play with the clients with newer solutions and offerings.

“We are confident with the prospects, based on the reactions that we are seeing from our customers. Our pipeline is already showing up and the outlook is quite healthy,” he added.

Before sealing the deal with Capgemini, Igate had sold its domestic infrastructure management services (IMS) operations to MindSquare Technologies, a Bengaluru-based IT services company. Sircar said it was part of the company’s strategy to get rid of low-margin business and the domestic IMS business fell under that category.

“It was a small transaction involving 300-400 people, which we sold for around $80,000. If you look at our history, we get rid of many low-margin customers to bring sharper focus in some other areas.”