Happiest Minds rules out job cuts after merger with ITC Infotech

The management of Happiest Minds Technologies on Tuesday ruled out any layoffs following its merger with ITC Infotech, stating that the deal is driven by a need for talent and "deep capabilities" rather than cost rationalisation.

Addressing a press conference after the merger announcement, top executives of the Bengaluru-based firm said that the ITC leadership has specifically stipulated the continuity of the entire workforce and leadership team.

"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.


"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," Happiest Minds CEO Joseph Anantharaju said.

The management highlighted that both companies are currently operating at high utilisation levels - ITC Infotech at 83-84% and Happiest Minds at 80% - leaving little room for headcount reduction.

Responding to concerns regarding potential overlaps in roles, Venkatraman Narayanan, Happiest Minds MD, said that at a broader level, there will be minimal overlap in focus areas and top customers.

"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," Narayanan said.

He added that the long-range plan focuses on size and scale benefits such as better hiring reach and newer delivery locations, rather than reducing people-related costs.

ITC Infotech, a wholly-owned subsidiary of diversified conglomerate ITC Ltd, will acquire a 22.1% stake in IT firm Happiest Minds Technologies for about Rs 1,330 crore as part of a strategic deal to merge the two companies to form an AI-first enterprise with a USD 1 billion turnover by FY28.

The acquisition of 3,36,61,700 equity shares will be made from Happiest Minds' promoter Ashok Soota and Ashok Soota Medical Research LLP in two tranches, according to regulatory filings.

Following the stake purchase, Happiest Minds will be amalgamated with and into ITC Infotech. The combined entity, with a global workforce of over 19,000 professionals, will bring complementary capabilities to deliver a full-stack value proposition for end-to-end solutions spanning build, intelligence and operations while expanding into high-potential verticals including hi-tech, healthcare and edtech.

The transaction is expected to be completed within the next 15 months.

Upon the merger becoming effective, ITC Infotech is proposed to be listed on the BSE and the National Stock Exchange (NSE).

Post-amalgamation, ITC Ltd will hold a 73.4% stake in the merged entity, while Happiest Minds' shareholders will own the remaining 26.6%.