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Delta Air cuts tech projects, slashes 1,300 vendor jobs

Delta outsources contracts to Tata Consultancy Services, Cognizant and IBM. It is as yet unclear to what extent each company has been impacted. “We have made a tough, but necessary decision to reduce contractor positions as Delta manages the impact of the Covid-19 pandemic to its business,” a Delta spokesperson told.

Last Updated: Apr 10, 2020, 09.28 AM IST
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Airlines and hospitality companies were the first to take a hit as several countries imposed lockdowns.
BENGALURU|MUMBAI: US-based carrier Delta Air Lines has suspended several technology projects due to the Covid-19 pandemic, impacting over 1,300 jobs at its outsourcing vendors in its home country and in India.

Delta has cancelled thousands of flights in the United States and to international destinations in Europe, the UK and India, hurting its operations.

Several countries have closed their airspace to passenger planes as they attempt to contain the spread of the virus.

Delta outsources contracts to Tata Consultancy Services, Cognizant and IBM.

It is as yet unclear to what extent each company has been impacted.

“We have made a tough, but necessary decision to reduce contractor positions as Delta manages the impact of the Covid-19 pandemic to its business,” a Delta spokesperson told ET. “Several service providers which provide contractor work support to Delta and other companies, have informed approximately 1,300 contractors within the IT organization that their work assignments at Delta are suspended.”

Delta is giving employees of its vendors an “opportunity to be placed with other clients,” the spokesperson said

When contacted, a TCS spokesperson said: "We have strategic relationships with our customers in this sector (airlines and hospitality) and we are partnering with them closely to help them navigate through the crisis. We will be unable to provide any further customer specific information.”

IBM and Cognizant did not respond to ET’s queries till press time on Thursday.

Airlines and hospitality companies were the first to take a hit as several countries imposed lockdowns to encourage social distancing and reduce the spread of the virus.

American Airlines and Intercontinental Hotels Group (IHG) have also slashed jobs with technology contractors as they try to stay afloat during the crisis.

IHG declined to comment for the story. American Airlines did not respond to a detailed questionnaire.

Delta and IHG are working with fewer outsourced staff in some areas, while nearly 90% of their existing services have been suspended for now, a source who did not wish to be named told ET.

“We should brace for some impact from the airline and travel sectors for the next two quarters. Revival should start for airline business towards the end of this year,” said Sanchit Vir Gogia, chief executive of Greyhound Research.

The travel and hospitality segment, which includes airlines, hotels, cruise ships and travel agencies, could see an up to 45% decline in growth in the coming quarters, according to the latest technology advisory firm ISG.

The only positive has been some increase in demand for a few services due to the lockdown.

“Business process and customer support/contact centre operations are seeing some traction as airlines are trying to work on customer loyalty programmes to please disgruntled clients,” said Mrinal Rai, principal analyst at ISG.

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