Atos is moving services currently delivered from Russia to other countries, including India and Turkey, the French IT consulting group said on Wednesday in light of the conflict in Ukraine.
The feasibility of exiting Russia has required significant planning in terms of implications for business operations and employees based there, the company said in an earnings statement.
Atos stock lost half its market value last year and exited France’s CAC 40 index after some accounting errors and a failed attempt to acquire a U.S. group precipitated a loss in investor confidence.
Rodolphe Belmer, who took over the reins from former chief executive officer Elie Girard in January, vowed to start over with a clean slate after the Paris-based firm said it had taken total writedowns of about 2.4 billion euros ($2.56 billion) in the second half of 2021.
Currently, the company has a total headcount of 40,000 people in India, and globally Atos has more than 1.0 lakh employees.
In an interview with Economic Times, Elie Girard, Chief Executive Officer, Atos said, “We are experiencing a productivity shock, like what we experienced 20 years ago, thanks to the acceleration of digitization, and India is at the heart of it,”
He also added that the acceleration of digitization has resulted in a demand boom across sectors, including the public sector and defense, which would benefit employers.
India is the best provider of those skills in the world, however at present, there is a talent war between demand and supply, he said.
In its earnings release, Atos revealed that on April 5, the group confirmed the managed exit of its Russia-based operations. Atos delivers critical digital services to some of its global clients out of Russia.
Earning Snapshot
Atos announced its revenue for the first quarter of 2022.
In Q1 2022, Atos’ consolidated revenue was € 2,747 million up +2.1% on a reported basis, and down -0.6% at constant currency. On an organic basis, revenue decreased by -2.4%. Q1 2022 showed a significant sequential improvement compared to Q4 2021, where revenue contracted -5.4% at constant currency and -6.9% organically excluding the impact of the UK BPO contract reassessment.
The company recorded an order entry of € 2.0 billion in Q1 2022, representing a book-to-bill ratio of 72%, compared to 96% in Q1 2021.
This low level is not representative of revenue trends expected for the balance of the year, as it is primarily the reflection of (i) the timing of contract renewals, as significant renewals took place in prior quarters, including in Q1 2021, and (ii) a decrease in the average duration of new contracts.
Atos’ full backlog was € 23.3 billion, decreasing by € 0.7 billion at constant currency compared to the end of 2021 and representing 2.1 years of revenue. The full qualified pipeline reached € 6.9 billion, broadly stable compared to the end of 2021 at constant currency.
Total headcount stood at 111,355 at the end of March 2022, up +2.0% compared to 109,135 at the end of December 2021 (+1.4% organically).
Company words for India
India is by far the best provider of those skills in the world, but at present, there is tension between demand and supply, he added.
The €11 billion firms invest about €400 million in India annually on employee-related expenses, including payroll and skilling.
India is an important market for the French firm, which is partnering with the government on the National Supercomputing Mission. The company has invested in NSM by way of assembly and testing of high-performance computers.
“I think this is very important for our employees in India that we are investing in this,” said Girard. At present, almost one-third of its revenues are driven out of India., he said.
“We have a quantum lab in India, and I think India can lead the pack in quantum given the magnificent digital force you have,” he said.
The coupling of 5G with edge technologies will also open up new opportunities for services firms.