Infosys may hire more in US or buy local firm
To mitigate visa law impact; sitting on $3.1-billion cash.
(ITS GOOD THAT INFOSYS CAME OUT OF THIS PROBLEM OF 'Not chop shop, but body shop: Schumer'...AND RISING...GOOD WISHES TO THEM...VIBHA)
Clicks of concern
Infosys expects a 30-40 basis point negative impact on the operating margin in FY12 from the increased visa cost, which gets implemented in October.
Currently, there are approximately 13,000 employees based in the US with 88-90 per cent of them on H1-B or L-1 visas.
K. Giriprakash
Bangalore, Oct. 4
Infosys Technologies is considering either increasing local hiring in the US or acquiring a US-based company in the event of Washington's protectionist policy measures continuing to impact it negatively.
During a recent mid-quarter investor conference call, Infosys is learnt to have informed analysts that it was prepared to increase local hiring and/or acquire a US-based firm that would result in the IT major having less than half of its American workforce on H1-B or L-1 visas.
An analyst with Janney Capital Markets told Business Line that the company would need to essentially double headcount in the US so as not to be penalised under the recent visa legislation. Infosys has $3.1 billion in cash and only $52 million debt. “It (acquisition) may not happen anytime soon. They are looking at it as just an option,” the analyst said. Infosys Technologies did not comment on the report as it has gone into a silent period ahead of its quarterly results on October 15.
Infosys expects a 30-40 basis point negative impact on the operating margin in FY12 from the increased visa cost, which gets implemented in October, the analyst report said. Currently, Infosys has approximately 13,000 employees based in the US with 88-90 per cent of them on H1-B or L-1 visas.
Lateral hiring
For Infosys, business is on track in North America with banking, financial services and insurance (BFSI) continuing to drive growth, and currencies also moving favourably.
Lower attrition and stable pricing were the other factors in favour of the IT major, the report said. North America contributes 67 per cent of Infosys revenues; Europe, about 20 per cent.
In a recent interview, a top Infosys official told Business Line that the company would hire more laterals in the US, and expects no cutbacks on tech spending there even as stimulus funding tapers off.
The official said that the company would recruit more laterals in the US as it moves up the value chain.
Over 8,000 people are expected to be recruited during the second quarter by the company and the bulk will be hired in the US.
He said the US hires would be of those with more industry skill-sets and of consultants. Infosys has already started hiring from B-schools in the US and is paying the candidates competitive salaries.
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