Infosys to hire 10,000 US workers over two years to placate Trump

VIDEO: REUTERS
Infosys Chief Executive Vishal Sikka took the helm almost three years ago with a mandate to remake the company's business model.
Infosys Chief Executive Vishal Sikka took the helm almost three years ago with a mandate to remake the company's business model.PHOTO: REUTERS

India-based IT services firm will also add four hubs to research technologies, creating more jobs

BANGALORE • India-based IT services firm Infosys says it plans to hire 10,000 Americans in the next two years, following criticism from the Trump administration that the company and other outsourcing firms are unfairly taking jobs away from US workers.

Infosys, which employs about 200,000 people around the world, will expand its local hiring in the United States while adding four hubs to research technologies such as artificial intelligence and machine learning.

The first location will open in Indiana in August and is expected to create 2,000 jobs for American workers by 2021, the company said.

The moves come after India's outsourcing firms drew flak for allegedly displacing American workers with employees from overseas.

Last month, President Donald Trump signed an executive order aimed at overhauling the work-visa programmes that Infosys and other firms use to allow overseas workers to enter the US.

"In the fast-changing world of today, we need the ability to be local. We need to be trusted by our customers as being local," said chief executive officer Vishal Sikka in an interview from Indiana. "To work with a mix of global and local talent is absolutely the right thing to do."

PROS AND CONS

This is positive in one aspect and negative in another: Increasing local hiring is important for Indian IT firms to retain ongoing projects in the US, as well as secure new ones. The downside is that the costs will rise.

MR URMIL SHAH, Mumbai-based analyst at IDBI Capital Market Services.

The US administration has taken several steps to reform the work- visa programmes that outsourcers have used to bring workers from overseas into the US.

Last month, the Justice Department warned employers applying for the visas not to discriminate against US workers, while the Citizenship and Immigration Services agency issued a memo laying out new measures to combat what it called "fraud and abuse".

In signing the executive order, Mr Trump said there had been "widespread abuse" and directed federal agencies to find ways to reorient the programme.

In that context, Infosys' hiring may be a useful move politically, even if it increases labour costs in the US.

"This is positive in one aspect and negative in another: Increasing local hiring is important for Indian IT firms to retain ongoing projects in the US, as well as secure new ones. The downside is that the costs will rise," said Mr Urmil Shah, Mumbai- based analyst at IDBI Capital Market Services.

Mr Sikka has come under particular pressure. The Trump administration's clampdown has hit his company's stock. In addition, a group of Infosys founders publicly accused the board of corporate governance violations and questioned hefty pay raises given to Mr Sikka and his deputy.

Mr Sikka, a former SAP SE executive, took the helm of India's No. 2 technology services provider almost three years ago with a mandate to remake the company's business model.

Indian outsourcing firms have said that they need to hire foreign workers in part because the US has a shortage of qualified employees.

Yet Mr Sikka says that is something Infosys can overcome.

"We are not only hiring computer science specialists but also engineers with software development aptitude and potential who we will train and prepare," he said in the interview.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on May 03, 2017, with the headline 'Infosys to hire 10,000 US workers over two years to placate Trump'. Print Edition | Subscribe