Nearshore Americas

Verizon Outsources IT Unit to Infosys, Transferring Over 2,500 Staff

US telecom company Verizon Wireless will transfer over 2,500 IT staff to Infosys as part of a US$700 million IT services deal.

Under the deal, Infosys will become the official IT partner of Verizon, shouldering the responsibilities of managing of the operator’s global information services unit.

The 2,500 IT employees at Verizon will join Infosys by the end of this year. Verizon is reported to have 7,000 employees in India as well, with most of them managing the company’s IT infrastructure, including data centers.

The agreement is part of Verizon’s broader effort aimed at saving US$10 billion in operational cost, says Bloomberg, adding that the telco has offered severance packages to around 44,000 employees, more than a quarter of the its global workforce.

A spokesperson for the carrier has defended the move in an interview with the Wall Street Journal, saying that the company would like to use funds for “transforming the business” rather than running the business.

“The pool of employees who either received the severance offer or are affected by the Infosys deal amounts to about 30% of the 153,100 employees that Verizon had globally at the end of June,” the Journal added.

Thanks largely to the shortage in tech talent and the higher salary that tech employees demand, outsourcing IT infrastructure to professional services providers has long been a trend in the United States.

Sign up for our Nearshore Americas newsletter:

However, the Infosys’ deal with Verizon has angered labor unions, with some of them describing the transfer of employees as “slave trade”.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

Add comment