Infosys to do it the American way
Indian tech giant plans to meet its US workforce requirements from within the country
significant economic incentives. The company already has an innovation hub in Silicon Valley.
The majority of Infosys’ business is in the US, and it typically receives several thousand H-1B visas every year to bring in mostly entry-level Indian programmers who move from project to project at companies in industries like banking, pharmaceuticals, manufacturing and energy.
Infosys has hired more American college graduates in the last couple of years, Kumar said. And now clients in the US want the company to have even more people on site locally. So it must expand its US workforce significantly, he said.
“We polled our customers and a lot of our newest locations require a lot of presence,” Kumar said. “This year, we are taking it to scale.”
Kumar declined to say whether Trump’s attacks on immigrant workers had influenced its decisions.
Whether Infosys follows through on its ambitious goal of hiring 10,000 Americans in the next two years remains to be seen. The company, which employs more than 200,000 people globally, has slowed its overall hiring to a trickle as revenue growth has stalled. Kumar said the US expansion plans depend on expected client demand, as well as whether it can find and train enough college graduates with skills in artificial intelligence and other technical fields that it needs.
Indiana’s governor, Eric Holcomb, aggressively pursued Infosys, the company said at a news conference with Holcomb. Infosys already had a small workforce of about 140 people in the state.
Potential investment
In February, Indiana state officials were approached about a potential investment by Infosys executives via the Indiana India Business Council, a local business group, according To Jim Schellinger, the state’s secretary of commerce.
Schellinger and his team travelled to India in mid-March, meeting with Infosys’s senior leadership and visiting its campuses in Bengaluru and Mysore to make their pitch for the state. At the end of the month, Infosys representatives sat down with Holcomb and agreed to go ahead with plans to invest in the state.
“They’re going to hire a wide variety of people including people with four year degrees as well as two-year ones,” said Schellinger. “These are high wage jobs, including software developers and architects.”
Holcomb was ebullient at the announcement in Indianapolis, thanking Infosys for showing confidence in the state’s tech workforce.
“You can’t even spell Indiana without starting with India,” he said. “Today is just the beginning of a great partnership.”
The state is offering Infosys incentives worth up to $31 million for the project. Indiana intends to give the company $500,000 in training funds and $15,250 in conditional tax credits per new job created.
Infosys argues that it saves money for major US companies and allows them to operate more efficiently.
Critics say that companies like Infosys have taken advantage of the H-1B programme, which is designed to complement the American skilled labour force, by bringing in workers who ultimately undercut it by taking lower wages. While the programme is relatively small, accounting for about 85,000 visas per year, it has become a lightning rod in the debate about large companies outsourcing US jobs.
The proposed changes to the H-1B visa programme have alarmed Indian companies and government officials, since Indians receive about two-thirds of those visas.
Prime Minister Narendra Modi discussed the visa issue with Trump in February, and Indian tech executives raised it with members of Congress during a visit to Washington about two months ago.
“Our objective was to make sure that a well-thought-out process was put in place,” said R. Chandrashekhar, president of the National Association of Software and Services Companies, India’s leading tech trade group, in a phone interview after Trump’s executive order.
Like US tech companies, the Indian outsources have trouble finding enough qualified Americans to fill jobs, he said.
“If the Indian companies are not able to get the skills that are needed in the US and not bring in skilled workers from somewhere else, then the only option is to move the job out of the US or leave the job undone,” he said.
As one of the largest beneficiaries of the H-1B programme, Infosys could be hit hard by changes to the system. Major US technology companies like Facebook and Qualcomm also use the programme to hire foreign talent, arguing that they cannot find enough skilled workers in the US. Still, outsourcing companies like Infosys have caused the most controversy.
One suggestion — that H-1B visas be given to companies paying the highest wages — could particularly affect outsourcing companies like Infosys, which usually do not offer wages as high as the likes of Facebook. To that end, new operations in America could help offset those difficulties.
Trump’s nationalistic approach to business puts international companies in a difficult position. But for many Asian companies, it is a position they are familiar with, with the rhetoric reminiscent of the politics of business in their home countries.
In recent years, India has introduced a so-called Make in India industrial policy to push companies like Apple to build out manufacturing plants in the country. Both Japan and China often exhibit the kind of economic nationalism that the Trump administration has championed.
In response to Trump’s approach, Alibaba Group of China and SoftBank of Japan have similarly made vows to hire large numbers of Americans. In Alibaba’s case, it has said its businesses will help create 1 million jobs. The promises are so large that many experts doubt all the jobs will materialise.
Still, their pledges won an endorsement from Trump. It is not clear whether such moves will ultimately help win political advantages from a president who has been sceptical about the benefits of trade agreements.
— New York Times News Service