H-1B visa row: Infosys clients mulling contingency plans   2 comments

An analyst at technology advisory firm Forrester has suggested that Infosys’ clients are considering contingency plans in view of US investigations into the company’s visa practices, a claim contradicted by the software exporter. 


Stephanie Moore, a strong votary of using US-based resources for information technology services, wrote in a May 2 blog post on the Forrester website that clients are planning several measures to insulate themselves from risk in case Infosys becomes an election-year scapegoat for American job loss.

These measures include stringent verification of Infosys’ visa documentation and discussion with alternative suppliers should there be a disruption at the Bangalore-based company.

Infosys countered by saying the blog post makes several unfair assumptions about marketplace reactions to recent news coverage about Infosys.

“In our conversations with clients in which we share additional background about the events raised in this blog, we remain firm in our conviction that there will not be any disruption or change in the levels of staffing, service or expertise on their business, now or going forward,” an Infosys representative said.

Infosys missed its revenue guidance in the fourth quarter which ended in March and temporarily froze salaries for its nearly 1.5 lakh employees, a rare departure from its track record of beating expectations. It is one of the country’s most respected companies and generally perceived as transparent, ethical and a symbol of India’s software prowess. With annual revenue of nearly $7 billion, or 36,000 crore, it is sitting on about $4 billion in cash.

Comments in the blog post are “ridiculous”, according to a senior industry executive, who cautioned that competitors may take advantage of the situation to poach Infosys’ clients.

Infosys pointed to its clients wins in the March quarter – it added 52 new clients, 12 of which are Fortune 500 corporations – as proof that it enjoys the trust of customers.

Moore, who specialises in sourcing and vendor management, appears to be supportive of the rhetoric against offshore outsourcing, the practice of providing IT services from locations such as India. She has characterised India as “overworked” and has instead been promoting what she calls “domestic outsourcing” which will keep IT jobs in the US.

“Interested in this domestic outsourcing trend? Considering alternatives to India? Please leave a comment, and I’ll try to respond,” she wrote in another post in January.

The immediate trigger for the most recent post could be Infosys’s recent disclosure to the US market regulator, the Securities and Exchange Commission, about coming under the US Department of Homeland

Security scrutiny for likely errors in its employee eligibility forms, or I-9 forms.

An industry expert, who works closely with several chief information officers of large US organisations that outsource to India, said that it is highly unlikely that Infosys systematically flouted the law.

“There may have been some process slippages, but it is not fair to hound them,” he said, adding that IBM had also faced similar investigations in the past.

Siddharth A Pai, partner and managing director at the Indian arm of ISG India, one of the largest outsourcing advisory firms, declined to comment specifically about Infosys but said that “there is no cause for alarm as long as clients manage their risks relating to data security, tax and international mobility”.


Posted May 8, 2012 by avinash2060 in Uncategorized

2 responses to “H-1B visa row: Infosys clients mulling contingency plans

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  2. Good information! Thanks for sharing!

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