Unicorn IT outsourcing contracts expected to dwindle
IT outsourcing contracts from startup unicorns are expected to drop this year due to the funding crunch and global economic uncertainty.
Unicorns are start-up companies that are valued at over US$1 billion. Recently, these companies have increased their engagement levels with global IT services players through multi-million dollar outsourcing contracts.
However, IT outsourcing advisor & Founder of Pareekh Consulting Pareekh Jain said that startups may hold back their IT spending resulting in the slowdown of contracts in the coming quarters.
Many IT and engineering services companies are working with many successful startups in their digital transformation journey. However, sources said that the deal amount is very less than the total order book to make any substantial impact.
Meanwhile, companies with a focus on verticals like educational technology, financial technology, or other specialized firms may see client-specific issues in coming quarters.
Currently, more than 10,000 tech staffers in India have been fired from their jobs in the last three months. While edtech startups are the most affected ones so far, even other startups with high cash burn rates have begun to face the heat in recent months.
