JOIN USTrepidations over the cost implications of the immigration overhaul planned by the US government continue to surface even as the Republican-led US House of Representatives is unlikely to act on the issue until at least early next year.
Even though the bill’s chances of passing a Congress vote looks remote as of now, companies like Wipro are keeping their fingers crossed.
“As we understand, the immigration bill is not a priority till December. However, this has huge cost implications for the Indian IT industry we should guard against it,” said Wipro Chief Executive Officer T K Kurien after the announcement of the second quarter results of the Bangalore-based company on Tuesday.
Kurien said that multiple new clauses plannedin the immigration overahaul could likely impact the way Indian IT companies do business in the US. “It can impact business, it can impact costs. We are constantly in touch with our customers and also looking at collective action wherever required,” Kurien said.
Noting that the company is poised to increase its fresher hirings out of US campuses, Kurien said that this is a logical step towards gradually phasing out the number of IT personnel being placed onsite from India. “A lot of talent currently being sent from India to onsite geographies will reduce as we go ahead to build more talent locally,” Kurien said.
Noting that over a period of time, the company would be increasing its campus hirings onsite, he said, “We will need more local talent out of the countries we operate in. So, expect more fresher hiring onsite.”
Wipro will be looking at recruiting more technically qualified employees into its ranks, he said, adding that this did not necessarily mean more engineering graduates. “A lot of the domain work we are increasingly carrying out onsite does not necessarily require engineers,” he said.
For the quarter ended September 30, 2013 Q2), the company’s operating margins improved by 2.5 per cent to 22.5 per cent, its highest in three years. The company will increasingly rely on services lines which require strong domain-specific skillsets, to drive margins going ahead.
The company reported a net reduction of 65 employees in its IT services employee base, which now stands at 1,47,216 people. Attrition in the IT services businesses increased 140 basis points to 15.4 per cent from 13 per cent during the previous quarter ended June 30, 2013.
However, stronger operational efficiencies saw the net utilisation rate rising to 66.1 per cent in Q2 from historically low levels of 64.7 per cent in the first quarter of fiscal 2014.