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Tata Consultancy Services (TCS) has acquired the staff and some of the assets of an IT operation of Prudential Financial as the US insurance company cuts costs.
The deal, which sees no money change hands, comes days after TCS announced that it had acquired the Postbank Systems IT unit from Deutsche Bank for a token sum of €1.
The Prudential Financial IT unit, Pramerica Technology Services, is based in Letterkenny, Ireland, where it employs 1,500 people. Staff at the centre will move to TCS, providing tech skills with specialist expertise in the insurance sector.
The centre currently services only Prudential Financial and although it will continue to do so and extend services, it will also add other customers, with the centre set to become one of TCS’s global delivery hubs.
This will be the first centre in Ireland for TCS and will serve customers across Europe and the UK, according to Amit Kapur, head of UK and Ireland at TCS. “We will acquire the staff with experience in areas such as software development, cyber security, user experience, DevOps and SecOps,” he said.
“At the moment, they are focused on customers across Prudential Financial’s business, and this deal will deepen our existing relationship with it. But it will also become part of our global delivery network and serve other customers.”
K Krithivasan, head of banking, financial services and insurance at TCS, said Ireland is well positioned to play a leading role in the digital economy. “This key investment deepens our relationship with Prudential Financial and gives us a new delivery capability in Ireland with specialised expertise, that significantly strengthens our ability to meet the growth and transformation needs of our customers globally,” he said.
“We warmly welcome Pramerica’s employees into the TCS family. We are confident they will avail the immense career growth opportunities that TCS offers, and fully realise their potential.”
TCS is one of the world’s biggest IT services companies, with more than 400,000 employees. It is referred to as India’s biggest IT services firm, but last month, for a short time, it also boasted the highest market value of all global IT services companies for the first time. TCS was then valued at almost $145bn, while Accenture, the previous biggest, was valued at $143.4bn.
Prudential Financial aims to reduce costs through the deal. CIO Stacey Goodman said: “We are incredibly proud of the organisation our colleagues in Letterkenny have built and evolved over the past two decades and excited for Pramerica’s next chapter together with TCS and in partnership with PFI.
“This transaction further expands our relationship with TCS, while advancing our ongoing transformation process and providing exciting growth opportunities for Pramerica Ireland employees and the Letterkenny region.”
Peter Schumacher, CEO of management consultancy The Value Leadership Group, said one likely reason Prudential chose to give this to TCS is the Indian firm’s reputation as a good employer.
“TCS is known as a firm with a very collaborative nature that takes a strong interest in the communities in which it operates, which would make it more attractive to Prudential than most other potential suitors. But make no mistake: although TCS has a warmer culture than most of the firms in its industry, it’s still a hard-charging organisation. Even if they continue to do a lot of work for Prudential, the deal is likely to be a major turning point for the Letterkenny unit.”
Read more about TCS
- Deutsche Bank has agreed to sell its retail banking IT operation to one of its main IT suppliers for a token €1.
- TCS’s financial results signal that enterprises are ready to invest in IT to help them recover from the coronavirus-related business slowdown.
- Rapidly-growing Tata Consultancy Services has its eyes on the US IT giants, with customer service key if it is to overtake them.