Infosys’ revenue grew 1.5% to $5.15 billion in the second quarter, lower than the growth reported by peers like HCLTech, Cognizant, and TCS. Its large deal wins rose 44% sequentially to $5.2 billion, but Infosys' growth was still the slowest among the leading India-based mega players in at least six quarters.
Infosys saw a key shift in the second quarter as its onsite project delivery mix declined to 22.6%, a 0.7% percentage-point reduction in the first half. In its primary market, North America, Infosys is seeing enterprise clients lowering discretionary spend and client-specific ramp-downs, particularly in hi-tech and retail.
To help clients cut costs and keep projects intact, Infosys is reducing work being done in primary client markets such as the U.S.
But where exactly is the work moving? One might expect Latin America, especially Mexico, to benefit directly, with obvious advantages like time zones, specialized talent, and the right ecosystem.
But Infosys says such work is moving back to India instead, with nearshore hubs like Mexico seeing only occasional gains. “In terms of offshoring, most of our offshoring is to India. We do use some of the nearshore locations at times, Mexico, Canada, etc. But when we talk about offshoring, it is always towards India,” Jayesh Sanghrajka, Group CFO at Infosys, said in the company's earnings call.
We ask nearshore experts why Latin America is not gaining as much from this shift as expected.