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Infosys completes localisation target for US, hires 10,000 employees

Given the importance of localisation, Infosys had moved Srikantan Moorthy from India to the US last May

Debasis Mohapatra  |  Bengaluru 

Infosys
FILE PHOTO: The logo of Infosys is pictured inside the company's headquarters in Bengaluru | Photo: Reuters

has completed its localisation target for the United States by hiring 10,000 employees by the end of June quarter. The tech major is planning to raise the number of locals in the coming quarters in an effort to build an employee pyramid.

The US, contributing more than 60 per cent of Infosys’ total revenue, is the most critical market for the firm. With increasing restriction on employee movement owing to H1B visa restriction, all IT firms are building up local employee base in the US for efficient delivery. While pointing out that the company would continue to hire locals, Chief Operating Officer U B Pravin Rao (pictured) said there were no new numbers to announce at this point. He was speaking after the second largest IT company announced its FY20 results on Friday.

In May 2017, had announced its plan to set up four technology and innovation hubs in the US and also hire about 10,000 locals over a two-year period as part of its localisation drive. While the company has hired the targeted number of locals from local universities, it has also set up four technology and innovation hubs in Indianapolis (Indiana), Raleigh (North Carolina), Hartford (Connecticut), and Phoenix (Arizona).

Given the importance of localization, had moved Srikantan Moorthy from India to the US last May as head of talent acquisition for the key geography.

Meanwhile, apart from hiring engineering students, the IT firm is also taking students with non-STEM (science, technology, engineering and mathematics) background in the US. Fresh graduates with design or other creative skills are being recruited by the IT services firm, Rao said.

He was speaking after the second largest IT company announced its FY20 results on Friday. In May 2017, Infosys had announced its plan to set up four technology and innovation hubs in the US and also hire about 10,000 locals over a two-year period as part of its localisation drive.

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While the company has hired the targeted number of locals from local universities, it has also set up four technology and innovation hubs in Indianapolis (Indiana), Raleigh (North Carolina), Hartford (Connecticut), and Phoenix (Arizona).

Given the importance of localisation, Infosys had moved Srikantan Moorthy from India to the US last May as head of talent acquisition for the key geography. Meanwhile, apart from hiring engineering students, the IT firm is also taking students with non-STEM (science, technology, engineering and mathematics) background in the US. Fresh graduates with design or other creative skills are being recruited by the IT services firm, Rao said.

" In terms of subcontracting, I think, both (subcontractor and own employees) will exist. There's always some demand which comes in where the fulfilment needs to be done on a relatively quick basis," said Salil Parekh, CEO & MD at Infosys. "We have some operational levers that we're putting in place, including localisation which will help us adjust the subcontracting usage," he added.


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In the recent quarters, use of subcontractors or third party vendors has grown for executing projects in the US due to demand for early completion and lack of skilled employees. In the just ended June quarter, the subcontracting cost was at 7.5 per cent of company's total delivery cost.

However, building up the employee pyramid in the US is coming at a cost due to the higher compensation paid to local recruits. This, besides the rising usage of subcontractors, is eating into the company's operating margin. Its operating margin, which stood at 20.5 per cent in June quarter, was adversely impacted by close to 140 basis points due to employee related expenses including the cost incurred for new visas.

Recently, the company had announced a 6 per cent wage hike for its employees located in India. For overseas employees, it was pegged at 1.5 per cent. In a strong start to this fiscal, Infosys on Friday reported a 12.4 per cent rise in its June quarter revenues, better than that of its larger rival Tata Consultancy Services (TCS) after a long time. The IT services firm has also raised its revenue guidance to 8.5-10 per cent for this fiscal against 7.5-9.5 per cent earlier.

First Published: Sun, July 14 2019. 00:38 IST
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