- If US suspends job visas, IT firms will need to hike local hiring, which may hit margins
- Employee costs account for 60-65% of the total operating costs for large IT services companies
Bengaluru/New Delhi: Companies such as Tata Consultancy Services Ltd (TCS), Infosys Ltd and Wipro Ltd will have to hire more American citizens if the US proceeds to suspend new job visas, a move that would substantially erode their margins.
According to a Wall Street Journal report, the Donald Trump administration is planning to bar new H-1B visa holders from coming into the country until the ban is lifted. Visa holders already in the US are unlikely to be affected.
Indian IT firms widely use H-1B visas to transfer highly skilled workers to the US, and the country accounts for 70% of the 85,000 annual H-1B visa cap, as per immigration data. The news about the planned visa suspension comes even as H-1B visa rejection rates for Indian IT firms have risen to 24% in 2019 from just 6% in 2015.
Industry body Nasscom said on Friday, “We seek exemption for technology workers as essential workers, from any restrictions that may be imposed in a second White House Proclamation. Priorities established by Department of Homeland Security’s CISA (Cybersecurity and Infrastructure Security Agency) that designates key categories of ICT workers as essential service, should help define the types of essential workers.”
Source: livemint
