Industry Odisha Bureau, Aug 4: American multinational technology corporation Google has reportedly slashed its outsourcing contract with Indian IT services company HCLTech by about $50 million annually.
As per international media reports, “Google trimmed the scope of a long-running outsourcing deal with HCLTech by USD 50 million annually, that was previously valued at around USD 200 million per annum. The duration of the outsourcing deal was nearly 10 years of engagement in application development and engineering work.”
On the consequences of Google’s slashing of the deal with HCLTech, international media have reportedly stated that, “Such a development would impact about 0.3% of HCLTech’s annual revenue (USD 14.7 billion) and roughly 6% of its expected FY26 incremental growth, while around 1,000 employees on the Google account will be redeployed to other projects rather than laid off.”
On the reasons behind Google’s contract reduction with HCLTech, international media have reportedly stated that, “It reflects two major industry trends: ‘Artificial Intelligence (AI) & Automation’, and ‘Vendor Consolidation’. Google is using AI-powered tools to reduce manual Information & Technology (IT)-related work enabling the same output with fewer resources, while enterprises are reducing the number of outsourcing partners to simplify operations and cut costs.”
Notwithstanding that, international media citing HCLTech’s official statements, have also reported that, “Despite the contract reduction, HCLTech and Google maintain a deep strategic alliance through Google Cloud. Focus areas are ‘Cloud Modernisation’,’Agentic AI Adoption’, ‘Secure AI Deployments’, and ‘Industry-Specify Solutions’. Also, over 2,000 GenAI-led customer engagements with HCLTech is expanding its Google Cloud-certified workforce to 35,000+ in three years.”
