Barely three quarters after taking over as President and CEO of IGATE Corporation, Ashok Vemuri has clinched the company’s largest multi-year deal ever, worth $200 million, in the second quarter (April-June) of fiscal year 2014.

While Vemuri declined to mention the name of the customer and total value of the multi-year deal, sources said, it is estimated at well over $200 million.

“IGATE has signed a multi-year, platform-based contract with CNA Financial, which is America’s eighth largest insurance company to design, implement and manage claim and policy holder administration of CNA’s long-term care (LTC) business. The contract is worth over $200 million. IGATE will administer the client’s LTC business through its proprietary and differentiated IGATE Business Administrative Solution (IBAS),” said an official in the know of things.

American banking and financial services firm Wells Fargo also estimated that the CNA contract could be worth over $200 million and said, it thinks the contract is one of the three large deals IGATE previously indicated that it had been pursuing.

Confirming this, Vemuri said “The second quarter has been a truly seminal quarter for IGATE. We have entered into a partnership to implement a transformational technology and best practice process for the LTC business of our client, which is by far the largest partnership in the company’s history. It is one of the three large deals that I had spoken about in the previous quarter and revenues for this deal have not kicked in as yet.”

On being asked about the status of the other two large multi-year deals, he said: “We continue to be positively placed in the other two large deals for which decisions are awaited in the coming quarter.”

New hiring strategy

In a marked departure from the industry practice of ‘just in time’ hiring, IGATE has moved to the ‘hiring for growth’ model.

While the company added a net of 2,500 employees during the last two quarters, a record number of 1,907 (net) employees were added during the second quarter taking the total headcount to 32,742 employees as on June 30, 2014.

On the logic for moving to a ‘hiring for growth’ model, Vemuri said “‘Just in time hiring’ for this industry is an inappropriate model to follow. If you believe you have the right business model and if the leadership has the confidence that they are delivering value to clients, then the right hiring model has to be to hire for growth and that is what we are doing.”

However, he admitted that the new hiring model has resulted in a marginal decline in utilisation from 74.2 per cent last quarter to 73.8 per cent in the second quarter. It plans to continue with its robust hiring over the next few quarters and increase its intake of freshers, which is low at present, at just 40 per cent of overall hires.

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