Indian IT firms to expedite acquisitions, local recruitment in US

Wednesday 30th November 2016 05:32 EST
 
 

Anticipating a more protectionist US technology visa programme under a Trump administration, India's $150 billion IT services sector will speed up acquisitions in the United States and recruit more heavily from college campuses in the county. Companies like Tata Consultancy Services, Infosys and Wipro have long used H1-B skilled worker visa to send computer engineers to the US, their largest overseas market, temporarily to service clients.

Following Donald Trump's campaign rhetoric, and his choice for Attorney General; Senator Jeff Sessions, many are expecting a tighter regime. Pravin Rao, chief operating officer at Infosys, said, "The world over, there's a lot of protectionism coming in and push back on immigration. Unfortunately, people are confusing immigration with a high-skilled temporary workforce, because we are really a temporary workforce." While a complete shutdown of skilled worker visas are expected, US businesses are heavily dependent on cheaper IT and software solutions, making Indian engineers an established part of the Silicon Valley. A more restrictive programme would mean Indian IT firms sending fewer developers and engineers to the United States and increasing the campus recruitment there. "We have to accelerate hiring of locals if they are available, and start recruiting freshers from universities there," Rao said. Noticing a change in the pattern of recruitment, he added, "Now we have to get into a model where we will recruit freshers, train them and gradually deploy them, and this will increase our costs."

One of several ways is to buy American companies, which would help Indian IT firms build their local headcount, increase their on-the-ground presence in keymarkets, and help counter any protectionist regulations. Indian software services companies have invested more than $2 billion in the United States in the past five years. North America accounts for more than half of the sector's revenue. "We have to accelerate acquisitions," Rao said. Wipro's chief financial officer, Jatin Dalal said his growth strategy is to buy companies that offer something beyond what Wipro already does, or, new disruptive firms. Chief Executive of Tech Mahindra, CP Gurnani said his firm, which two years ago bought network services management firm Lightbridge Communications Corp, is on the lookout for more US acquisitions, particularly in healthcare and fintech- financial technology firms that are disrupting traditional banking services.

"The Plan B would be to accelerate the trend.. to reduce their reliance on people and increase their focus on delivering automation, leveraging the cloud for their clients," said Partha Iyengar, Gartner's head of research in India.


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