(Oct 9): Asia’s largest provider of software outsourcing services shrugged off the Trump administration’s latest curbs on visa-based immigration, saying the fresh restrictions won’t affect its hiring or business strategy.
India’s Tata Consultancy Services Ltd said it will continue to step up local hiring in the US, including graduates. The firm reiterated it intends to hire 15,000 people in the US over the next five years, according to a statement on Friday.
The Trump administration on Thursday announced restrictions on the Permanent Labor Certification Program, or PERM, which allows companies to sponsor a foreigner who has been working in the US under the H-1B and other visa holders to become a legal permanent resident, the first step to becoming a US citizen. Officials singled out Microsoft Corp and several Indian IT firms including TCS as having abused the program.
“Our PERM applications were in single digits in the last two years and hence we do not expect the suspension of the program to impact our workforce strategy and customer engagements,” TCS said.
Shares of TCS climbed 4.2% in early Mumbai trading, while rivals Wipro Ltd and Infosys Ltd also advanced. Late Thursday, TCS reported quarterly profit that topped analysts’ estimates.
Silicon Valley’s reliance on foreign workers has long been a flashpoint in the debate over immigration. Since Donald Trump’s return to office last year, the administration has seized on those concerns and pressed tech giants to do more to train and hire US workers.
As part of that effort, Trump has moved to make it harder for companies to use H-1B visas to attract foreign talent, targeting a major source of workers for the industry. The changes have included proposals for US$100,000 (RM408,760) filing fees for most candidates and tightening the rules of how the H-1B visas are awarded in an annual lottery, giving priority to companies offering the highest salaries.
The PERM suspensions announced on Thursday targeted Microsoft, Adobe Inc as well as Indian software services giants including TCS, Infosys, Wipro and HCL Technologies Ltd. Representatives of Infosys, Wipro and HCL didn’t immediately respond to requests for comment.
While the latest measures do not cancel the current H-1B visas, it would mean thousands of Indian engineers working in the US for the likes of TCS and Infosys would likely be forced to leave after the expiry of their work visas. Smaller US tech firms, unaffected by the new policy, could benefit though — by poaching Indian talent.
In the near term, IT service providers affected by the curbs may have to rely more heavily on local US talent and subcontracting, potentially increasing hiring and compliance costs, said Sumit Singhania, head of research at Bajaj Broking.
Longer term, more tech work could move outside of the US, potentially benefiting IT services providers’ profit margins, analysts at SBI Securities said in a note.
Indian outsourcers have traditionally used H-1B visas to move engineers and developers to service clients in the US, their largest market. But over the years, they’ve cut back their reliance on the visa program and hired more locally, Indian IT services lobby ground Nasscom said in a statement.
“Consequently, the number of employees transitioning from H-1B visas to permanent residency through the PERM process is also relatively limited,” it said.
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