On May 02, Infosys, India’s second largest information technology (IT) company, announced that it will hire 10,000 American workers over the next two years. Three days later, on May 05, Nasdaq-listed Cognizant Technology Solutions, which has a large presence in India, also revealed plans to significantly ramp up hiring in the US. if and when they do end up attracting talent, Indian IT companies may have to pay through their nose for it.
India’s famed multi-billion dollar information technology (IT) industry has been facing challenging times over the past 6-12 months with top-notch IT companies already facing earnings pressures in recent quarters due to tough business environment prevailing in their most lucrative US and European markets.
With President Donald Trump making it abundantly clear that he will curb immigrant work visas to protect domestic jobs, technology outsourcing firms such as Tata Consultancy Services, Infosys and Wipro are focusing on localisation and hiring more Americans to serve their clients in the U.S.
On May 2, 2017 Infosys announced plans to hire 10,000 American workers over the next two years.
At Greyhound Research we believe, steps such as these by IT Services Providers eloquently tell a tale of the pressure they are experiencing under the new Trump administration.
American President Donald Trump’s policy to protect jobs by imposing restrictions on H-1B visas is unlikely to be of any help to that country and may hurt US interests, say experts. What Trump is seeking to protect are entry level jobs that are being phased out by the tech majors, with automation, artificial intelligence and robotics paving the way to increased productivity.
With the latest missive from the Donald Trump administration on H-1B visa, cautioning companies against misuse, the immigration issues of the Indian IT sector are back in news. And it is not the US alone that is drumming up protectionism for political gains. However, industry observers say that Indian IT services companies are resilient enough to weather such issues.
In a fresh blow to software professionals, the Trump administration has moved to bar entry-level programmers from the H-1B visa programme.
US’ decision to temporarily suspend the expedited premium processing of H-1B visas will lead to process delays for IT firms too.
US President Donald Trump’s proposal for immigration reforms to encourage merit-based migration might help export-focused software and information technology (IT) sector.
The Indian software services companies will breathe a sigh of relief as the Indian ministries, authorities and industry lobby had a dialogue with a visiting eight-member US delegation headed by Congressman Bob GoodLatte, on the ongoing concerns of H1-B visa holders.
A starting salary of Rs 1.25 crore per annum to a Delhi student matches the average pay package of American software engineers but is still 40-50% more that what Indian techies working in the US earn.
Despite the impending dark overtones cast on India’s IT sector, the reality on the ground is far from anything bleak. Irrespective of the announcements from US president Donald Trump, Brexit concerns and the slowing global economy, the IT sector seems to have factored the low spell and will be only marginally impacted. The sector will likely grow 8-9 percent in FY2017E and could grow at same pace or accelerate in FY2018, according to a technology report from Kotak Instituitional Equities released a week ago.
Donald Trump’s efforts to limit the number of temporary workers in the US will dent India’s software industry.
Today a legislation impacting H1-B visa programme has been introduced in the US House of Representatives making it difficult for companies in the US to employ skilled foreign workers. Among other things, the bill more than doubled the minimum wage requirement of H1-B visa holders to US $130,000.
It may not be a good time to be a techie in America. Correction: It may not be a good time to be a non-American in Trump’s America.
Software services industry, already facing pressures on profitability and revenue, has become the latest target of the Trump administration’s moves to protect American jobs.
On 31 January 2017, an announcement impacting H-1B visa programme has been made by the US House of Representatives making it difficult for companies in the US to employ skilled foreign workers. Among other things, the minimum wage requirement of H-1B visa holders has been more than doubled to USD 130,000. At Greyhound Research we believe this is a significant announcement by the newly appointed Trump administration. While changes were expected under the new President, the suddenness and the order of the announcement has surely caught IT Services Providers across the globe by surprise.
India’s information technology (IT) sector will face temporary setback to move workers from India to the US with the bill introduced in the US House of Representatives that mandates minimum wages of H1B visa holders at $130,000, double the current limit.
On Dec. 8, thousands of supporters in a packed hall in Des Moines, Iowa vociferously cheered President-elect Donald Trump as he reiterated his campaign promise to bring back home millions of jobs that Americans have lost to foreigners.
India’s large outsourcing firms may be hesitant to give a verdict on policies of President-Elect Donald Trump when he gets into office, thanks to his anti-immigration and anti-outsourcing rhetoric that helped him win elections. But Gopi Natarajan, chief executive of Omega Healthcare is betting on Trump’s policies would increase outsourcing and offshoring to countries such as India.
Republican candidate Donald Trump just two days ago during his election rally had strongly criticized technology giant IBM for laying off 500 staffs working at Minnepolis located on mid-western US state of Minnesota. During his rally, Trump also had said that if he gets elected, his government will not allow companies like IBM to move jobs outside the US and they would have to pay 35 percent tax for developing products outside the US.