Indian information technology firms, especially Infosys Technologies, are again being singled out by US politicians for the loss of jobs in their country — a claim hotly contested by Indian IT service providers and industry association Nasscom.
Infosys, which derives over 66 per cent of its revenue from North America, employs around 12,000 people in the US. However, while discussing the Immigration Bill on the US Senate floor on Thursday, Charles Schumer, the Democrat Senator from New York, likened Infosys Technologies to a “chop shop” — the place where stolen parts are dismantled and sold. The senator was participating in the debate before the Senate passed a $600 million Border Security Bill which has proposed to almost double the H-1B and L-1 visa application fees from $2,300 to $4,300.
“The emergency border funds will be paid for by assessing fees on foreign companies known as chop shops that outsource good, high-paying American technology jobs to lower wage, temporary immigrant workers from other countries. These are companies such as Infosys. But it will not affect the high-tech companies such as Intel or Microsoft that play by the rules and recruit workers in America,” The Wall Street Journal quoted Schumer as saying in the Senate.
The Indian IT industry has consistently protested the anti-outsourcing rhetoric of American politicians. The uproar of the anti-outsourcing lobby was at its height when the US was heading for presidential elections, and continued even after President Barack Obama took over. In May 2009, fresh out of elections, Obama had singled out Bangalore, the Silicon Valley of India, to refer to outsourcing of jobs. “Say no to Bangalore and yes to Buffalo,” the US president had said at that time.
Infosys resisted from making an official statement on the Senators' statement. However a senior company executive said: “It's very unfortunate that the Senator has made such a statement. Politicians make all kind of statements in the legislature and we don't want to show a red flag to the bull at this point of time.” On its part, the company has been trying to increase the number of local people on its rolls. “There is not enough talent in the country (the US), which is hampering this cause,” said an official from the company's human resources department. For the past several quarters, Infosys has recruited 200 to 250 local people in the US, he added.
Talking to Business Standard recently, Infosys CFO V Balakrishnan had said the company was planning to hire about 1,000 people in the US in the current financial year. “We are also taking a lot of interns. Currently we have about 5 per cent local people in our global workforce, and we would certainly like to increase the number. But it will take some time,” he had added.
It's time our government realizes who our real friends are and stop licking the feet of the so called first world developing countries. No point having relations with countries who do not respect us.
Its a good move by US. If I am the president of US , I would have done the same. US senator Charles Schumer might have been bit cautious while talking with media. Company like Infosys has very strong fundamentals and principles. Indian engineers should try to excel in their field rather than jumping into an IT comp even after graduating from Mechanical,Electrical or Chemical stream. India is not yet strong in manufacturing sector. So our leaders should try to do some thing to fix this gap. Indian IT companies should try to invest more in R&D and sell products along with IT services. At present India is much more dependent on US. US may feel small discomfort if India discontinues its support but its very minimal. @INDIA: Sudden wealth is always bad.
Bart,
If I were to go by your logic, Intel Corp generates over 65% of their revenues from Asia, the US accounts for only 13% of their revenues, should they be laying off people in the US and moving all their jobs to Asia?, the last I checked Intel employs over 70% of their headcount in the US, how fair is this??
Infosys HAS to keep wages low because they beat their competition primarily on price. They do this by hiring Workers on visas. In fact existing visa holders in the US will not work for Indy because of the less than market wages they pay. So they bring people from India. They apply in bulk due to the low visa fees and thus deny students in the US from being able to get a work permit. This is a very good move by the US government.
Posted by: CoolIndian
August 09 , 2010, 13:15 IST
Indians like you are the problem. Staying in other countries such as US but not understanding how people from Europe, Japan, Germany, Polland etc work. No one spits on their own country.. Please learn from them during your tenure in US.
I am an Indian and I am not sure why anyone should sympathize with Indian body shop firms. India is a huge country with more than one billion people potentially benefiting from local IT infrastructure. Understandably the primary focus of the body shops is profiting through wage arbitration but in the long run does not help India move towards a developed nation status. Nasscom and the Indian government should collaborate on placing focus on local projects instead of depending on revenue from US.
There is no need for Infosys or any other Indian software company to comment on the rhetoric of Senator Schumer which is meant for political consumption at home. There is one and only one reason why American and European companies outsource work to Indian companies in any FIELD not merely software. That reason is value for money which they cannot get in their own countries. In the US the number and quality of locals with the required skills and more importantly the customer focussed attitude is quite low. In fact many US companies will collapse if they decide to terminate outsourcing to Indian software companies.
What Schumer suppresses is fact that his so called "true" American companies like IBM, CSC, Accenture, HP, Dell etc: are expanding rapidly in India while cutting back jobs in the US - WHY ? Obviously such enquiry is not politically correct !!!
No American believes that they are really trying to hire a significant number of Americans, or that they would give an American employee a signficant technical role. Window dressing, just for appearances sake, maybe. If these companies make 60% of their revenue in the US, but they don't hire 60% of their employees from the US, then I'm in favor of our government sticking it to them with higher fees.
Posted by: dhaval
August 10 , 2010, 02:03 IST
Yet Another BS form Yet Another American, Lets see Whre do most of your so called Blue Chip Companies get their business form. Coke, Pepsi, Nike, IBM, MS, Intel, GM, Ford, Apple, Colgate, CAT? The ans is ASIA more so India and China by your logic they all should employee most of their workforce in India and China. How about following thru that first. Please read/listen to the conf calls of the US companies you will know form where they earn. Now if India and China start kicking these companies out there would be even more unemployment in US. US had its days in the Sun now its our time.
Posted by: Anand
August 08 , 2010, 18:47 IST
To Bart,
The day when you and your fellow countrymen stop buying cheap Chinese stuff and support your local American manufacturer, then you can blame us Indians on "outsourcing" and "loss of jobs". Until then, STFU.
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