Washington: Infosys, a global tech outsourcing giant under fire from President Donald Trump for stealing American jobs, announced Tuesday that it plans to hire 10,000 new U.S. workers over the next two years.
The firm, headquartered in Bangalore, plans to open four U.S.-based “hubs,” starting in Indianapolis in August. The company expects that the Indiana site will create 500 jobs by next year, and possibly up to 2,000 by 2021.
“We want to create a culture of close proximity,” said Vishal Sikka, the Infosys chief executive, touting the company’s desire to train and hire graduates from local universities and community colleges during a news conference at the Indiana state capitol.
Critics have ramped up their attacks on outsourcing firms, including Infosys, in light of Trump’s forceful “America first” rhetoric and the companies’ rampant use of H-1B visas to bring tech workers to the United States.
The visas, distributed to companies by lottery each year, are supposed to be used to import high-skilled foreign workers in technology and science fields. But critics say firms like Infosys, traditionally among the largest H-1B visa recipients, often use them to displace American workers and depress overall wages.
Trump last month reiterated his campaign promise to protect American workers and their wages, signing an executive order at a Wisconsin tools manufacturer to begin overhauling the decades-old H-1B visa program. The White House on Tuesday characterized the Infosys announcement as a political victory, pointing to it as further evidence that companies are renewing investment in the United States as a result of the Trump administration’s “pro-growth economic agenda.”
“We’re glad to see companies like Infosys see opportunity in the American economy again,” Ninio Fetalvo, a White House spokesman, said in a statement to The Washington Post. Infosys maintains that its announcement was a “natural evolution” of the company’s work in the U.S. However, the company will reportedly receive a large tax break for its expansion into Indiana. Infosys’ U.S. outposts will focus on technology and innovation, Sikka said, including artificial intelligence, digital technologies and big data, serving companies spanning a variety of industries from financial services to manufacturing and pharmaceuticals. The company will hire mostly engineers, computer scientists and programmers.
Sikka, who is based in the company’s Palo Alto offices, did not reveal where the other technology centers would be located or provide a timeline of when those jobs would be created. Ravi Kumar S., president of Infosys, said plans for creating the U.S. employment sites began a year ago, and accelerated in Indianapolis in February following Trump’s inauguration.
“Creating local jobs is the focus,” said Kumar, adding that Indiana, Vice President Mike Pence’s home state, could expect to see 500 new jobs by 2018. The company will also work closely with local universities on developing their computer science programs. The Indianapolis Star reported that the state offered Infosys up to $31 million in conditional tax credits and training grants, the largest incentive package in Indiana history. Indiana Gov. Eric Holcomb, R, praised the announcement Tuesday morning as historic and “game changing.”
“We’re celebrating our futures together in Indiana’s tech ecosystem,” Holcomb said. “You can’t even spell Indiana without starting with India.” Infosys, founded in 1981, was the first Indian IT company to be listed on the Nasdaq composite index. It has more than 200,000 employees worldwide, including about 2,000 U.S. workers, Sikka told Reuters.
Multinational outsourcing firms, many of which are based in India, are exempt from the federal requirement that they not displace American workers provided they pay H-1B visa holders at least $60,000 a year. That threshold still falls below the market rate for American tech workers. The average annual salary at Infosys is $81,705, according to the website Myvisajobs.com. In 2013, Infosys paid a record $34 million settlement after a Justice Department investigation into allegations of systemic fraud and abuse with another work visa program, actions that the government said cost American jobs.
In a separate case, the Labor Department in 2015 cleared Infosys of any wrongdoing after American technology workers at Southern California Edison complained that they were wrongly displaced by foreign workers using H-1B visas. The company maintained that it had complied by U.S. immigration laws. “If this is indeed a response to President Trump’s statements then it demonstrates the power, but also the limitations, of the bully pulpit,” said Ron Hira, a public policy professor at Howard University who specializes in high-skill immigration and the American engineering workforce.
“A few individual cases of self-reform, no matter how large they may be, are no substitute for real reform – by both the administration and Congress.” Given that Infosys would be one of the biggest losers on any H-1B crackdown, their move to ramp up its American hiring should come as no surprise, said Salil Choudhary, founder of Dataology, a Maryland-based IT sourcing firm supplying companies around the country with American workers.
He expects Infosys’ decision to have ripple effects throughout the industry. “Other companies will be following suit,” said Choudhary, who came to the U.S. on an H-1B visa 18 years ago and is now a citizen. “The step they are taking is good, but it’s not a gesture of love for this country. It was a forced decision. The sentiment in this country was going against these companies, so they have to show goodwill. They have no choice.”