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Fearing tighter US visa regime, Indian IT firms rush to hire, acquire

Staff from those three companies accounted for around 86,000 new H1-B workers in 2005-14

Sankalp Phartiyal & Euan Rocha | Reuters  |  Bengaluru 

Start-ups lean on temporary jobs to sail through tough times

Anticipating a more protectionist US technology programme under the administration, India’s $150-billion information technology (IT) services sector will speed up acquisitions in the US and recruit more heavily from college campuses there.
 
Indian companies including (TCS), and have long used H1-B skilled worker visas to fly computer engineers to the US, their largest overseas market, temporarily to service clients.


 
Staff from those three companies accounted for around 86,000 new H1-B workers in 2005-14. The US currently issues close to that number of H1-B visas each year.
 
President-elect Trump’s campaign rhetoric, and his pick for of Senator Jeff Sessions, a long-time critic of the programme, have many expecting a tighter regime.
 
“The world over, there’s a lot of protectionism coming in and push back on immigration. Unfortunately, people are confusing immigration with a high-skilled temporary workforce, because we are really a temporary workforce,” said Pravin Rao, chief operating officer at Infosys, India’s second-largest information technology firm.
 
While few expect a complete shutdown of skilled worker visas as Indian engineers are an established part of the fabric of Silicon Valley, and US businesses depend on their cheaper IT and software solutions, any changes are likely to push up costs.
 
And a more restrictive programme would likely mean Indian IT firms sending fewer developers and engineers to the United States, and increasing campus recruitment there.
 
“We have to accelerate hiring of locals if they are available, and start recruiting freshers from universities there,” said Infosys’ Rao, noting a shift from the traditional model of recruiting mainly experienced people in the US.
 
“Now we have to get into a model where we will recruit freshers, train them and gradually deploy them, and this will increase our costs,” he said, noting typically recruits 500-700 people each quarter in the US and Europe, around 80 per cent of whom are locals.
 
Acquisitions
 
Trump’s election win and Britain’s referendum vote to leave the European Union are headwinds for India’s IT sector, as clients such as big US and British banks and insurers hold off on spending while the dust settles.
 
In India’s IT hub of Bengaluru and the financial capital Mumbai, executives expect a Trump administration to raise the minimum wage for foreign workers, pressuring already squeezed margins.
 
Buying US companies would help Indian IT firms build their local headcount, increase their on-the-ground presence in key markets and help counter any protectionist regulations.
 
Indian software services companies have invested more than $2 billion in the US in the past five years. North America accounts for more than half of the sector’s revenue.
 
“We have to accelerate acquisitions,” said Rao at Infosys, which in the past two years has bought companies including US-based Noah Consulting and Kallidus Technologies.
 
Jatin Dalal, Wipro’s chief financial officer, said his growth strategy is to buy companies that offer something beyond what already does, or new, disruptive firms — such as Appirio, a US cloud services firm.
 
The chief executive of Tech Mahindra, C P Gurnani, said his firm, which two years ago bought network services management firm Lightbridge Communications Corp, is on the look-out for more US acquisitions, particularly in health care and fintech — financial technology firms that are disrupting traditional banking services.
 
Offshoring & automation
 
In a broader shift from labour intensive onsite projects, Indian IT firms are also turning to higher-tech services such as automation, cloud computing and artificial intelligence (AI) platforms.
 
With better technology and faster networks, IT firms are encouraging Western clients to adopt more virtual services.
 
CEO Vishal Sikka says he has focused on automation and AI as growth drivers since 2014. “The AI platform is 5-6 per cent of our revenues,” he told Reuters. “Three years ago, it was zero.”
 
More automation would mean fewer onshore developers. “The ‘Plan B’ would be to accelerate the trend... to reduce their reliance on people and increase their focus on delivering automation, leveraging the cloud for their clients,” said Partha Iyengar, Gartner’s head of research in India

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Fearing tighter US visa regime, Indian IT firms rush to hire, acquire

Staff from those three companies accounted for around 86,000 new H1-B workers in 2005-14

Staff from those three companies accounted for around 86,000 new H1-B workers in 2005-14 Anticipating a more protectionist US technology programme under the administration, India’s $150-billion information technology (IT) services sector will speed up acquisitions in the US and recruit more heavily from college campuses there.
 
Indian companies including (TCS), and have long used H1-B skilled worker visas to fly computer engineers to the US, their largest overseas market, temporarily to service clients.
 
Staff from those three companies accounted for around 86,000 new H1-B workers in 2005-14. The US currently issues close to that number of H1-B visas each year.
 
President-elect Trump’s campaign rhetoric, and his pick for of Senator Jeff Sessions, a long-time critic of the programme, have many expecting a tighter regime.
 
“The world over, there’s a lot of protectionism coming in and push back on immigration. Unfortunately, people are confusing immigration with a high-skilled temporary workforce, because we are really a temporary workforce,” said Pravin Rao, chief operating officer at Infosys, India’s second-largest information technology firm.
 
While few expect a complete shutdown of skilled worker visas as Indian engineers are an established part of the fabric of Silicon Valley, and US businesses depend on their cheaper IT and software solutions, any changes are likely to push up costs.
 
And a more restrictive programme would likely mean Indian IT firms sending fewer developers and engineers to the United States, and increasing campus recruitment there.
 
“We have to accelerate hiring of locals if they are available, and start recruiting freshers from universities there,” said Infosys’ Rao, noting a shift from the traditional model of recruiting mainly experienced people in the US.
 
“Now we have to get into a model where we will recruit freshers, train them and gradually deploy them, and this will increase our costs,” he said, noting typically recruits 500-700 people each quarter in the US and Europe, around 80 per cent of whom are locals.
 
Acquisitions
 
Trump’s election win and Britain’s referendum vote to leave the European Union are headwinds for India’s IT sector, as clients such as big US and British banks and insurers hold off on spending while the dust settles.
 
In India’s IT hub of Bengaluru and the financial capital Mumbai, executives expect a Trump administration to raise the minimum wage for foreign workers, pressuring already squeezed margins.
 
Buying US companies would help Indian IT firms build their local headcount, increase their on-the-ground presence in key markets and help counter any protectionist regulations.
 
Indian software services companies have invested more than $2 billion in the US in the past five years. North America accounts for more than half of the sector’s revenue.
 
“We have to accelerate acquisitions,” said Rao at Infosys, which in the past two years has bought companies including US-based Noah Consulting and Kallidus Technologies.
 
Jatin Dalal, Wipro’s chief financial officer, said his growth strategy is to buy companies that offer something beyond what already does, or new, disruptive firms — such as Appirio, a US cloud services firm.
 
The chief executive of Tech Mahindra, C P Gurnani, said his firm, which two years ago bought network services management firm Lightbridge Communications Corp, is on the look-out for more US acquisitions, particularly in health care and fintech — financial technology firms that are disrupting traditional banking services.
 
Offshoring & automation
 
In a broader shift from labour intensive onsite projects, Indian IT firms are also turning to higher-tech services such as automation, cloud computing and artificial intelligence (AI) platforms.
 
With better technology and faster networks, IT firms are encouraging Western clients to adopt more virtual services.
 
CEO Vishal Sikka says he has focused on automation and AI as growth drivers since 2014. “The AI platform is 5-6 per cent of our revenues,” he told Reuters. “Three years ago, it was zero.”
 
More automation would mean fewer onshore developers. “The ‘Plan B’ would be to accelerate the trend... to reduce their reliance on people and increase their focus on delivering automation, leveraging the cloud for their clients,” said Partha Iyengar, Gartner’s head of research in India
image
Business Standard
177 22

Fearing tighter US visa regime, Indian IT firms rush to hire, acquire

Staff from those three companies accounted for around 86,000 new H1-B workers in 2005-14

Anticipating a more protectionist US technology programme under the administration, India’s $150-billion information technology (IT) services sector will speed up acquisitions in the US and recruit more heavily from college campuses there.
 
Indian companies including (TCS), and have long used H1-B skilled worker visas to fly computer engineers to the US, their largest overseas market, temporarily to service clients.
 
Staff from those three companies accounted for around 86,000 new H1-B workers in 2005-14. The US currently issues close to that number of H1-B visas each year.
 
President-elect Trump’s campaign rhetoric, and his pick for of Senator Jeff Sessions, a long-time critic of the programme, have many expecting a tighter regime.
 
“The world over, there’s a lot of protectionism coming in and push back on immigration. Unfortunately, people are confusing immigration with a high-skilled temporary workforce, because we are really a temporary workforce,” said Pravin Rao, chief operating officer at Infosys, India’s second-largest information technology firm.
 
While few expect a complete shutdown of skilled worker visas as Indian engineers are an established part of the fabric of Silicon Valley, and US businesses depend on their cheaper IT and software solutions, any changes are likely to push up costs.
 
And a more restrictive programme would likely mean Indian IT firms sending fewer developers and engineers to the United States, and increasing campus recruitment there.
 
“We have to accelerate hiring of locals if they are available, and start recruiting freshers from universities there,” said Infosys’ Rao, noting a shift from the traditional model of recruiting mainly experienced people in the US.
 
“Now we have to get into a model where we will recruit freshers, train them and gradually deploy them, and this will increase our costs,” he said, noting typically recruits 500-700 people each quarter in the US and Europe, around 80 per cent of whom are locals.
 
Acquisitions
 
Trump’s election win and Britain’s referendum vote to leave the European Union are headwinds for India’s IT sector, as clients such as big US and British banks and insurers hold off on spending while the dust settles.
 
In India’s IT hub of Bengaluru and the financial capital Mumbai, executives expect a Trump administration to raise the minimum wage for foreign workers, pressuring already squeezed margins.
 
Buying US companies would help Indian IT firms build their local headcount, increase their on-the-ground presence in key markets and help counter any protectionist regulations.
 
Indian software services companies have invested more than $2 billion in the US in the past five years. North America accounts for more than half of the sector’s revenue.
 
“We have to accelerate acquisitions,” said Rao at Infosys, which in the past two years has bought companies including US-based Noah Consulting and Kallidus Technologies.
 
Jatin Dalal, Wipro’s chief financial officer, said his growth strategy is to buy companies that offer something beyond what already does, or new, disruptive firms — such as Appirio, a US cloud services firm.
 
The chief executive of Tech Mahindra, C P Gurnani, said his firm, which two years ago bought network services management firm Lightbridge Communications Corp, is on the look-out for more US acquisitions, particularly in health care and fintech — financial technology firms that are disrupting traditional banking services.
 
Offshoring & automation
 
In a broader shift from labour intensive onsite projects, Indian IT firms are also turning to higher-tech services such as automation, cloud computing and artificial intelligence (AI) platforms.
 
With better technology and faster networks, IT firms are encouraging Western clients to adopt more virtual services.
 
CEO Vishal Sikka says he has focused on automation and AI as growth drivers since 2014. “The AI platform is 5-6 per cent of our revenues,” he told Reuters. “Three years ago, it was zero.”
 
More automation would mean fewer onshore developers. “The ‘Plan B’ would be to accelerate the trend... to reduce their reliance on people and increase their focus on delivering automation, leveraging the cloud for their clients,” said Partha Iyengar, Gartner’s head of research in India

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Business Standard
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