H-1B giant Infosys gets carrot -- and stick -- to hire ‘Americans’

Facing visa reforms, company ramps up U.S. hiring and gets tax credit

H-1B Visa statue of liberty against american flag

IT offshore outsourcing giant Infosys -- a firm in the Trump administration's H-1B reform bull's-eye -- said Tuesday it plans to hire 10,000 "American workers" over the next two years.

India-based Infosys will hire those employees in four separate locations in the U.S., first in Indiana, which offered the company more than $30 million in tax credits. The other locations weren't announced.

President Donald Trump wants to make it difficult for companies such as Infosys to get H-1B visas. Infosys has consistently been among the top three largest visa users.

The company employs about 20,000 workers in the U.S. according to court records, many of whom are likely on work visas. In 2014, for instance, Infosys received approval for just over 4,000 visas that year alone, a typical year. A visa is good for up to six years.

But Infosys officials didn't mention Trump or the visa program at Tuesday's announcement. What they focused on instead was the creation of a "hub" in Indiana. The reason, according to CEO Vishal Sikka: Infosys wants to be closer to U.S. schools and clients.

"As we look to the future, that close proximity, that zero distance idea, of being together is extremely important," said Sikka.

Infosys plans to create 2,000 new jobs in Indiana, spending nearly $9 million to lease and equip a facility of up to 80,000 square feet. Indiana is expected to approve $15,250 in tax credits for each new job created -- making the credit potentially worth more than $30 million.

The IndyStar called the deal "the largest state incentive package — ever."

Apart from the various proposals for visa reform bubbling up in Washington, industry analysts see a need for IT services firms to bolster U.S. workforces to deliver more sophisticated services. But Infosys is still in the business of moving work offshore; many IT workers have complained of training Infosys employees as a condition of their severance.

A civil lawsuit alleging discrimination, filed in 2013 in federal court in Wisconsin, claims the firm's U.S. workforce is overwhelmingly made up of South Asian workers. Infosys, in court papers, has broadly denied the allegations.

Trump has proposed a number of changes to the visa program, including replacing the lottery, which distributes the visas randomly. The administration wants a system that awards visas first to higher paying companies and U.S.-educated students. It also wants to raise the wages of visa workers, who can be paid substantially less than the average wage for a given IT occupation.

"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, an associate professor of public policy at Howard University. "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."

"The abuse of the H-1B program is widespread and endemic to the program," said Hira. "A major overhaul of the H-1B program's design is needed."

A White House briefing last month cited the problems with the lottery.

At the briefing, a senior administration official said: "Just to illustrate a little bit more how the lottery works -- so some companies oftentimes are called outsourcing firms. You may know their names well, but ... the top recipients of the H1B visa are companies like Tata, Infosys, Cognizant -- they will apply for a very large number of visas, more than they get, by putting extra tickets in the lottery raffle, if you will, and then they'll get the lion's share of visas. Which is very different than I think how most people think of the H-1B program -- they imagine it for more -- being for -- again, they would think of it as being for skilled domestic work, rather than contract work."

Copyright © 2017 IDG Communications, Inc.

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