Mindtree plans 2 new US delivery centres

To hire 400 more employees at existing centre

Mid-size information technology (IT) services company Mindtree plans to set up its second delivery centre in the US this year and expand the team at its old centre at Gainesville, Florida, in the country.

“We are planning to set up two more delivery centres in the US, of which one is likely to come up in 2014,” Chief Operating Officer Krishnakumar Natarajan said.

“The one we plan to set up in 2014 will mostly be on the west coast, probably in Washington state. We have completed nearly 60 per cent of the process to set it up. The rest of the procedure is likely to complete in the next three-four months.”

The third delivery centre is likely to be set up in the mid-western region in either Michigan or Ohio, Natarajan said without sharing any details. The US accounts for 56 per cent of Mindtree’s revenues as of December, followed by Europe (30 per cent) and India (six per cent).

Several Indian software services companies have been looking to increase reach in the client-regions, especially the US, not only to improve their services but also to hedge themselves against protectionist rules or adverse immigration laws.

The Bangalore-based company had set up its first delivery centre in the US around 18 months ago. The centre currently has around 100 employees catering to about 10 clients. Natarajan said, the company will look to add 400 more employees at this centre.

While experts may raise concerns around erosion of margins due to larger on-site hiring, Chief Financial officer Rostow Ravanan said, in the long-term it would only be in the benefit of the company.

“There may be a little impact in the short-term basis, but you can always recover it, because then you charge customers also accordingly,” Ravanan told Business Standard. “The other way to look at it is also, that if you don’t have this talent and facilities overseas, then the customer may not even give you the project, or you may fail to execute a project.”