Infosys' appeasement of Trump will lead to job cuts in India

Head Hunters India, an executive search firm, recently termed the Infosys' move to hire 10,000 Americans as an act to 'appease' US President Donald Trump's administration which has tightened the rules of H-1B visa programme to stop its 'abuse'.

Head Hunters India founder-chairman and managing director K Lakshmikanth also said local hiring in the US was very costly and would lead to offshore job cuts in India.

The move by the Indian software major came amid US accusations that top Indian IT firms, including TCS and Infosys, were unfairly cornering the lion's share of H-1B visas by putting extra tickets in the lottery system.

Trump recently signed an executive order for tightening H-1B visa rules to stop its 'abuse' and ensure they are given to the 'most-skilled or highest paid' petitioners, a decision that would impact India's $150 billion IT industry.

Lakshmikanth said the move to hire 10,000 American workers in next two years "can be seen as an act of Infosys to appease Trump's administration, which could file legal suites against IT companies, including Infosys for 'misuse' of H-1B work visas programme."

He also said the Infosys' announcement came after Acting Assistant Attorney General of Civil Rights Division Tom Wheeler's statement that the Justice Department will not tolerate employers misusing the H-1B visa process to discriminate against US workers.

"The announcement of the US Citizenship and Immigration Services (USCIS) to deter and detect what it described as fraud and abuse of the H-1B work visas is indicative of US government's intentions to go tough and stringent in approval of H-1B visas this year," Lakshmikanth told PTI.

Infosys had on May 3 announced it will hire 10,000 Americans in the next two years and open four new centres in the US as part of efforts to mitigate the impact of H1-B visa curbs.

The move was welcomed by the Trump administration as a "political victory" which it said was achieved as a result of US government's "pro-growth economic agenda."

To a query, Lakshmikanth said it needed to be seen how soon it will take Infosys to ramp up local hiring in the US.

"All said and done, according to me, Infosys will take time to ramp up local hiring as it is very costly. The company needs to pay a minimum of $80,000 (Rs 52 lakh) per year to a skilled American techie.

For the same amount, it can hire four software engineers in India for its offshore development work, he said.

Currently, an Indian IT firm pays $60,000-65,000 per year for techies working in the US on H-1B visas and they return after three years of onsite work.

Lakshmikanth also said if Infosys hired about 500 Americans techies, it will result in a loss of 2,000 jobs in India for offshore operations. "Automation and artificial intelligence will reduce hiring by another 30-40%," he added.

On April 24, Nasscom had come out in defence of its members -- TCS and Infosys -- saying the two accounted for only 8.8 per cent of the approved H1B visas in 2014-15.

The H-1B is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations requiring theoretical or technical expertise in specialised fields. Indian technology companies depend on it to hire tens of thousands of employees each year for their US operations.