Tuesday, 30 May 2017 08:52

Indian outsourcer says US-first policy will hit IT industry Featured


An Indian outsourcing company has finally come out with a definitive statement on US President Donald Trump's visa policies, criticising them and saying they will damage the IT industry.

TechMahindra's vice-chairman Vineet Nayyar said during a conference call on Monday, accompanying the announcement of the company's fourth quarter earnings, “Trump’s America First agenda and focus on curbing immigration, especially around H-1B visa policies, will hurt the IT sector.

“The norms propose a radical shift in policies related to visa quotas and allotment, thereby, leading to a tougher application procedure and higher cost of Indian IT companies looking to bring talent to the United States," Nayyar said, according to Bloomberg.

The company reported fourth quarter of 5.9 billion rupees (US$91 million), nearly two billion rupees below what analysts had estimated.

“These are unsettling times in both... politics and economics of both Europe and US,” Nayyar said. “However, the demand for technological services continues unabated. We do believe that as always, given our resilience, we will be able to see through - see our way through this current fog.”

Indian outsourcing companies have been on the backfoot ever since the US administration announced changes in the H-1B visa system that is the main conduit whereby these companies recruit workers for projects in the US.

outsource map

Earlier this month, it was reported that big outsourcers Cognizant Technology, Infosys and Tata Consultancy Services were being targeted by the US for a crackdown on H-1B visa use.

In what has been seen as a measure to mollify the US government, Infosys announced in April that it would be recruiting 10,000 Americans over the next two years. And Cognizant informed iTWire that it had hired 4000 US citizens in 2016.

The major outsourcing companies have all announced job cuts as earnings fall, according to The Times of India. Cognizant is expected to cut about 6000 jobs, Infosys is set to sack about 1000, Wipro has said that if earnings do not grow, then 10% of the workforce would be laid off, and French company Capgemini has announced cuts in India.

Things are not looking rosy for many IT companies in Bangalore, the main city where outsourcers are based, either. China's LeEco has fired 85% of its staff in India, mobile services firm Aircel sent 700 employees packing, online retailer Snapdeal announced unspecified cuts, fashion retailer YepMe cut staff, ethnic fashion site Craftsvilla laid off hundreds, payment gateway PayU cut 110 staff, industrial marketplace Tolexo laid off 50 employees, and Internet company Girnar Software shed 100 jobs,

Changes in the H-1B visa system mean that computer programmers would not be presumed to be automatically eligible for an H-1B visa, and this has led to a drop in the number of applications for these visas in the current year.

The United States Citizenship and Immigration Services this year received 199,000 applications for H-1B visas for the next fiscal year, compared to 236,000 received last year.

Earlier in the year, the USCIS said it would be suspending premium processing of H-1B visas for up to six months.

A total of 85,000 H-1B visas are issued annually and are meant for foreign workers who have specialised skills to spend a maximum of six years working in the US for a company that has sponsored them.

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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