State Farm Insurance terminates Satyam contract: affects 400 on-site employees

One of its largest clients and a Fortune 500 company, State Farm Insurance Co., has terminated its contract with the Indian technology vendor. The US-based insurance service provider announced its decision to terminate its contract on Friday. Following a board meeting on Saturday in Hyderabad, Satyam had said the company has been “in conversation with customers” who had “expressed their continued support”.

While the value of the contract or its material impact on Satyam could not be immediately ascertained byMint, a US daily Pantagraph, based in Illinois, Chicago, where State Farm is headquartered, reported on Saturday that at least 400 on-site staff of Satyam may be unemployed in the wake of termination of the contract. State Farm could be one of Satyam’s largest clients but the size of the contract is not known. A Satyam spokesperson declined to comment on the size of the contract and the impact of its termination.

According to an analyst with a Mumbai-based domestic brokerage who does not want to be identified, State Farm Insurance is a $50 million (Rs244 crore) client and one of the top 10 clients for Satyam.