Happiest Minds' CEO, MD rule out layoffs after merger announcement with ITC Infotech; say deal to boost talent pool
Indian IT services company Happiest Minds Technologies on Tuesday said it does not expect any layoffs following its merger with ITC Infotech, saying the deal is aimed at strengthening its talent pool and expanding its “deep capabilities” rather than reducing costs.
Happiest Minds' executives rule out layoffs
Top executives of the Bengaluru-based firm addressed a press conference after the merger announcement and said that ITC leadership had assured that the entire workforce and leadership team would remain in place, PTI reported.
CEO Joseph Anantharaju said, “One of the requests and stipulations from ITC was that each and every Happiest Mind continues. One of the primary reasons for making this acquisition is the deep capabilities in digital data, cybersecurity, and AI. They don't want to lose this capability.”
He added, "Obviously, once we start having discussions, the new structure will evolve and people may have slightly different responsibilities, but we don't anticipate any leadership change. We have a good pipeline and order book. So there's no need to look at any kind of rationalisation."
At the press conference, Happiest Minds' MD Venkatraman Narayanan said, "The question of layoffs doesn't arise at all. We should be building more capabilities. Even in the age of AI, you still need human beings to deliver or to provide oversight." He added that the long-term strategy is centred on achieving greater scale, expanding hiring capabilities and establishing new delivery locations, rather than cutting employee-related expenses.
Narayanan also addressed concerns regarding a likely overlap in roles post-merger and said that in focus areas and among top customers, the overlap is likely to be minimal.
Happiest Minds-ITC Infotech merger: What we know
Conglomerate ITC's wholly owned subsidiary, ITC Infotech, is set to acquire a 22.1 per cent stake in Happiest Minds Technologies for around ₹1,330 crore as part of a strategic agreement to merge the two firms and create an artificial intelligence (AI)-first enterprise with a $1 billion turnover by FY28.
Once the merger becomes effective, which is likely to happen in the next 15 months, ITC Infotech will hold a 73.4 per cent stake in the merged entity, while Happiest Minds' shareholders will own the remaining 26.6 per cent. Additionally, after the merger comes into effect, ITC Infotech is likely to be listed on the BSE and the NSE.
According to regulatory filings, the acquisition of 3,36,61,700 equity shares will be completed in two tranches from Happiest Minds promoter Ashok Soota and Ashok Soota Medical Research LLP.
Following the stake sale, Happiest Minds will be merged into ITC Infotech, creating a combined entity with a global workforce of more than 19,000 professionals. The merger will bring together complementary capabilities to offer end-to-end solutions across build, intelligence and operations, while expanding into high-potential sectors such as hi-tech, healthcare and edtech.
Happiest Minds' stock tumbles, ITC jumps
On Tuesday, Happiest Minds' stock tumbled nearly 11 per cent after the merger was announced. The shares declined 10.92 per cent to close at ₹362.70 on the BSE. The stock touched an intraday low of ₹357, down 12.31 per cent. On the NSE, Happiest Minds shares ended 10.87 per cent lower at ₹362.70. In contrast, shares of ITC, the parent company of ITC Infotech, gained 3.98 per cent to close at ₹266.45 on the BSE.
(with PTI inputs)