HCL Technologies (HCL) announced a seven-year managed services agreement worth $1.3 billion with Xerox.
HCL, as part of the new IT contract announced today, will be managing portions of shared services, including administrative and support functions, including, selected information technology and finance functions (excluding accounting).
Xerox will transfer a group of employees to HCL. India-based HCL did not reveal the number of employees, who will be transferred to the IT services company.
This seven-year agreement for an incremental $1.3 billion continues to build on the success of the Xerox-HCL relationship, which began in 2009 with product engineering and support services.
HCL currently manages aspects of Xerox’s mechanical, electrical and software engineering activities for printer and imaging product lines. Together, HCL and Xerox have delivered 215 U.S. patents and have created R&D labs that are integrated with Xerox infrastructure and standards.
“This partnership is a testament to the strong Xerox-HCL relationship that has grown through multiple collaborations over the past 10 years,” said C Vijayakumar, chief executive officer, HCL Technologies.
Xerox posted 7.8 percent drop in revenue to $2.53 billion in Q4 2018, as businesses continue to cut back spending on printers and photocopiers. Net income of the company was $137 million, or 56 cents per share, in the three months ended Dec. 31, compared to a loss of $190 million, or 76 cents per share, a year earlier.
“The evolution of our shared services represents our culture of continuous improvement and allows us to more efficiently address customer needs while delivering significant cost savings to reinvest in the business,” said Steve Bandrowczak, chief operations officer of Xerox.
HCL Technologies reported revenue of Rs 15,699 crore (+22.5 percent) and net profit of Rs 2,605 crore (+25.5 percent) for the third quarter ended December 31, 2018, driven by software services.
Software services revenue of HCL Technologies grew 18.4 percent from Rs. 7,631 crore last year to Rs. 9,034 crore for the third quarter in FY2019.
Americas and Europe grew 12.9 per cent and 14.5 per cent year-on-year, respectively, with strong growth in telecom, media, publishing and entertainment, technology & services, life sciences & healthcare and retail & CPG, HCL Technologies said.