BREAKING NEWS

Infosys plans to hire 10,000 US workers after Trump targets outsourcing

By REUTERS

MAY 2, 2017 11:11

SAN FRANCISCO/MUMBAI - India-based IT services firm Infosys Ltd said it plans to hire 10,000 U.S. workers in the next two years and open four technology centers in the United States, starting with a center this August in Indiana, the home state of US Vice President Mike Pence.

The move comes at a time when Infosys and some of its Indian peers such as Tata Consultancy Services and Wipro Ltd have become political targets in the United States for allegedly displacing US workers' jobs by flying in foreigners on temporary visas to service their clients in the country.

The IT service firms rely heavily on the H1-B visa program, which US President Donald Trump has ordered federal agencies to review.

In a telephone interview with Reuters from Indiana, Infosys Chief Executive Vishal Sikka said his company plans to hire US workers in fields such as artificial intelligence.

"When you think about it from a US point of view, obviously creating more American jobs and opportunities is a good thing," Sikka said.

While Indian outsourcing firms have recruited in the United States, Infosys is the first to come out with concrete hiring numbers and provide a timeline in the wake of Trump's visa review.

Last month, two industry sources told Reuters that Infosys was applying for just under 1,000 H-1B visas this year. One of the sources said that was down from about 6,500 applications in 2016 and some 9,000 in 2015.

Indian IT service firms, which typically flood the lottery system each year with thousands of applications, have been among the largest H1-B recipients annually.

Indian politicians and IT industry heads have been lobbying US lawmakers and officials from the Trump administration to not make drastic changes to visa rules, as this could hurt India's $150 billion IT service sector.

The 10,000 new US jobs would be a small part of Infosys' overall workforce of more than 200,000.

Sikka said Infosys has already hired 2,000 U.S. workers as part of a previous effort started in 2014.

"We started small at first and have been growing since then," Sikka said. "The reality is, bringing in local talent and mixing that with the best of global talent in the times we are living in and the times we're entering is the right thing to do. It is independent of the regulations and the visas."

The four hubs being set up will not only have technology and innovation focus areas, but will also closely serve clients in sectors such as financial services, manufacturing, healthcare, retail and energy, said Infosys.

The first hub, which will open in Indiana in August 2017, is expected to create 2,000 jobs by 2021, the company said.

UNSUSTAINABLE MODEL

Infosys did not disclose the financial impact of its plans. It declined to comment on whether the planned US jobs would account for a large percentage of overall hiring in the coming two years.

Based on Infosys' recent hiring trends, however, the planned hirings in the US could account for a substantial portion of the company's net workforce additions over the period.

Infosys, which added nearly 18,000 jobs in 2015, slowed its hiring pace considerably, creating just about 6,000 jobs in 2016 amid market uncertainty caused by Brexit and heightened clamor for tougher US immigration laws that led some US clients to hold-off on new projects.

"Hiring locally is a compulsion and it's not just because of what's happening in the US," said Harit Shah, research analyst at Reliance Securities. "The model itself is not sustainable."

The company cautioned last month that it would struggle to reach its ambitious $20 billion revenue target by 2020, as the Indian software service sector has been hit by cautious client spending due to a rising protectionist wave globally.

The United States is the largest market for Indian software service companies, but other countries like Australia have also begun to target Indian IT service companies that use temporary visa programs.

Shares in Infosys were down less than 1 percent in midday trading in India, following news of the US hiring plans.

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