Infosys to Hire 10,000 American Workers After Trump Criticismby
Hiring pledge comes after Trump seeks review of visa programs
Move may win favor in the U.S. but bump up labor costs
India’s Infosys Ltd. said 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 U.S. workers.
Infosys, which employs about 200,000 people around the world, will expand its local hiring in the U.S. while adding four hubs to research technologies such as artificial intelligence and machine learning. The first location will open in Indiana in August 2017 and is expected to create 2,000 jobs for American workers by 2021, the company said.
The moves come after India’s outsourcing firms have come under attack for allegedly displacing American workers with employees from overseas. Last month, President Donald Trump signed an executive order aimed at overhauling the work visa programs that Infosys and other firms use to bring overseas workers into the U.S.
“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.”
The U.S. administration has taken several steps to reform the work visa programs that outsourcers have used to bring in workers from overseas. Last month, the Justice Department warned employers applying for the visas not to discriminate against U.S. 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, Trump said there had been “widespread abuse’’ and directed federal agencies to find ways to reorient the program.
In that context, Infosys’s hiring may be a useful move politically, even if it increases labor costs in the U.S.
“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 Urmil Shah, Mumbai-based analyst at IDBI Capital Market Services Ltd.
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 Sikka and his deputy.
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. Instead of charging customers such as Goldman Sachs Group Inc. and Toshiba Corp. for the hours spent by technicians and engineers to build and manage corporate computer systems, Infosys set out to build automated software and tools that would detect problems and solve them with less human intervention, freeing up consultants to provide more specialized and proactive services.
Indian outsourcing firms have said that they need to hire foreign workers in part because the U.S. has a shortage of qualified employees. Yet 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. “In the past two years, through the non-profit Infosys Foundation, we’ve trained 2,500 teachers and over 135,000 students and that has gone extremely well. The number of people we have trained is almost getting to the size of our delivery organization and we will be tapping these.”