3 Major IT Companies Face Massive Hit as Clients Delay Big Deals!

Slower global growth caused by the US-China trade war and a delayed Brexit have taken a toll on top IT companies as clients are delaying decisions on large deals.

India's top IT services company Tata Consultancy Services (TCS) also mentioned delayed deals as one of the reasons for slower growth in the second quarter. "We had hoped that Q2 would be the strong quarter. That has not turned out. Deals have gotten delayed. Whether they will close in Q3 or not, we will have to wait and see."

Earlier this month, DXC Technology slashed its revenue target from $20.75 billion to $19.5-$19.8 billion as clients postponed signing new deals. “We’ve seen additional delays in many large deals that we expected to close during the second quarter and that was particularly in the Americas and the UK," DXC's Chief Financial Officer Paul Saleh was quoted as saying by Economic Times.

"Overall, clients are skeptical about whether to invest in technology for growth or leveraging it for cost reduction and hence the uncertainty for large-sized deals. (We have) also come across some deals where clients have put the contract process on hold, though not explicitly stating the reason," Said Mrinal Rai, Principal Analyst at ISG.