NEW DELHI -- Indian information technology companies are sending fewer workers to the U.S. and hiring more local staff there as technical visas grow scarcer under President Donald Trump.
Tata Consultancy Services, Infosys and Wipro have shared a business model of sending software developers and other homegrown technicians to U.S. corporations seeking highly skilled workers who cost less to employ. In the Trump era, these companies are forced to change tack, including expanding into advanced fields like artificial intelligence.
The IT groups' proportion of sales made in the mainstay North American market fell in the year ended March, slipping 2.4 percentage points to 51.6% for TCS, 1.5 points to 60.4% for Infosys, and 1.3 points to 53.4% for Wipro.
The companies had already begun dispatching fewer domestic workers to the U.S., but the trend accelerated after the Trump administration signaled last year that it would make it harder to obtain H-1B visas for specialist workers. TCS, Infosys and Wipro applied for just shy of 40,000 H-1B visas in 2017, down nearly 20% on the year, the San Francisco Chronicle reported, based on Department of Labor statistics.
Meanwhile, Infosys has announced plans to hire 10,000 new workers in the U.S. through 2019, bringing on 1,000 to 2,000 technicians at advanced technology research and development hubs in four U.S. states including Indiana and North Carolina. The move "reflects the changing needs in the world today [for] 'localization,'" said CEO Salil Parekh.
Indian IT companies long depended on services in software development, and related processes such as testing, for much of their earnings. But those processes are becoming increasingly automated, stunting growth prospects. As a result, these companies are cultivating other markets including Europe and Japan, as well as expanding into such advanced fields as AI, big-data analysis and the "internet of things."
In the past year, TCS has won orders to build internet-connected supply chain systems for the Japanese auto industry, as well as to help bring AI technology to a global biopharmaceuticals maker and perform big-data analysis for a major financial services company. Its revenue from digital services in the year ended last month rose 35% year on year to over $4 billion, comprising one-fifth of the total.
Stock markets showed appreciation for the two-pronged reform efforts, as TCS' market cap broke $100 billion for the first time after April 19's earnings release. Revenue for the January-March quarter totaled about $4.9 billion, up 12% on the year in its first double-digit growth since that same quarter in 2015. Its consolidated earnings results for the year ended March showed revenue increasing 9% to $19 billion, with net profit gaining 2% to $4 billion.
Digital-related annual revenues are growing at Infosys and Wipro as well.