Infosys to hire in the US amid Trump H1-B visa review | Business| Economy and finance news from a German perspective | DW | 02.05.2017
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Infosys to hire in the US amid Trump H1-B visa review

The India-based IT service firm plans to set up new innovation centers in the US and hire 10,000 workers as it grapples with the likelihood of visa restrictions to be imposed by the Trump administration.

Infosys chief executive Vishal Sikka said on Tuesday that his company was "committed to hiring 10,000 American technology workers over the next two years" as part of what he called "Infosys' three-decade-long investment across the US."

Infosys said it would seek experienced tech professionals and recent graduates from universities and community colleges under efforts to staff four new US hubs it planned to establish. Their focus would be on technology and innovation, as well as serve clients in financial services, manufacturing, healthcare, retail and energy, the company said. The first hub, which would open in Indiana in August, was expected to create 2,000 jobs by 2021.

H1-B visa program review

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

The IT service firms rely heavily on the H1-B visa program, which US President Donald Trump ordered federal agencies to review. Indian IT firms providing services in the US have been accused of using the visa to send engineers from India with lower pay scales than their US counterparts to work on client sites and keep operating costs low.

India's IT industry body Nasscom has claimed in a recent statement that Tata and Infosys - the country's top two IT companies - together received 7,504 approved H-1B visas in 2015 which was only 8.8 percent of the total such visas given.

Tech industry sources told the news agency Reuters that Infosys was applying for just under 1,000 H-1B visas this year, down markedly from about 6,500 applications in 2016 and some 9,000 in 2015.

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The end of a business model?

Infosys' plans mark a big increase in US hiring since 2014, when Vishal Sikka became chief executive, saying it would create 2,000 US jobs.

In a telephone interview with Reuters from Indiana, Sikka said Infosys had achieved that goal. "We started small at first and have been growing since then," he said, adding that the timing of the decision was not related to the visa review.

"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," he noted.

Analysts believe the company's US hiring drive will push up costs for Indian IT firms as they chase people with the right skills.

"The supply of science, technology, engineering and mathematics skills is not that much in the US, so to get the right talent they might have to pay higher salaries," said PhillipCapital analyst Shyamal Dhruve.

And Harit Shah, research analyst at Reliance Securities told Reuters that hiring locally was "a compulsion" because bringing in workers on temporary visas was "not sustainable" as a model.

The company said 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. Other countries, such as Australia, have also started to target Indian IT service companies that use temporary visa programs.

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uhe/kd (Reuters, dpa)