California Utility Bankruptcy can Harm Indian IT Firms


Tata Consultancy Services is probably going to be affected by the bankruptcy filing of its customer Pacific Gas and Electric also inconveniences at other California utilities can hurt other Indian IT companies.

Californian utilities have confronted vulnerability for a considerable length of time over the prospect that they can be considered in charge of broken gear that prompted huge out of control wildfires in the US state. PG&E, the state’s biggest power provider, was connected to a progression of rapidly spreading fires in California, in which many individuals have died, & a large number of organizations and homes were decimated. Not long ago, the utility petitioned for bankruptcy protection in the wake of confronting the likelihood of billions of dollars in cases identified with the blazes.

TCS gained a multi-year, multi-million dollar outsourcing contract from the utility during 2017, a contract which prompted after-effect from hostile to offshoring activists.

PG&E is likewise an Infosys customer, yet it was not able to find out the effect of the contract on the Bengaluru-headquartered firm.

TCS refused to answer queries on the effect of the bankruptcy.

Other California utilities, for example, Southern California Edison that is additionally confronting inquiries concerning its part in the wildfires, US media houses have revealed. SCE likewise outsources to Indian IT firms, for example, Infosys and TCS.

An analyst with a Mumbai business indicated that might be the PG&E liquidation would largely affect TCS yet the other utilities are additionally confronting these issues and if it spreads, it can marginally affect Indian IT firms. He added that he assumed that IT firms had found a way to secure themselves.

Indian IT firms have confronted the brunt of the bankruptcy of their customers, both in lost business as well as held back payments. Wipro a year ago was hit by the liquidation of British firm Carillion and indebtedness of local Telco Aircel. Be that as it may, Wipro altered its risk policy to ensure it will not be harmed by different customers who become bankrupt.

In October, Wipro CEO Abidali Neemuchwala said that after the occasions their firm had with two customer bankruptcies in Q4 (of a year ago), they have changed their risk policy to shift towards money based accounting for certain customers. So fortunately when Sears went bankrupt, the firm didn’t need to come and disclose that this customer went bankrupt.

Robert Lewis

Robert graduated from Brandman University, where he got his bachelor’s degree in Business Administration. Born in Massachusetts, Robert’s family moved to Kentucky in 2005 where he spent his college life and worked as an insurance agent for four years. Now is the founder and team leader of the website.

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