Wipro has put in place a strategy to cushion the impact of visa-related regulatory changes in the US.
At the heart of the matter is the US Immigration Bill that was passed in the Senate last month, which increases costs for software services exporters and restricts placement of H-1B employees in the US, like Wipro. However, it will become a law once the US House of Representatives approve it.
Talking to Business Line , Wipro CEO T.K. Kurien said the company has a Plan B and is working on how quickly it can implement it. “Whether we can put it together in weeks or months is what we are working on,” he said. He said most probably it will take three months to put the plan in action.
May hit margins
Suresh Senapaty, Executive Director and CFO, said the prices charged for outsourcing services would go up and the way employees are deployed for projects will have to be re-looked. “We are constantly talking to our clients on this and if it becomes a law, we will have to work on ways to neutralise cost effects on both the clients and us,” he added.
Manik Taneja, an analyst with Emkay Global Financial Services, estimates that this would impact margins in the range of 3-3.5 per cent.
Company officials also point to increased investments in geographies such as the US, which has created more American jobs than their rivals like IBM or Accenture, referring to a recent JP Morgan India report.
“We will hire more green card holders and locals if it comes to that,” said Pratik Kumar, Executive Vice-President, Human Resources, Wipro.
According to Senapaty, the Bill was passed with a limited population (11 million) point of view and we are hopeful that when the final version comes out, it will address this aspect.
The company does not give out employees based in the US but in its 2012-13 annual report said that out of the 1.4 lakh employees, around 8.5 per cent of the workforce is non-Indian. The issue of H-1B has been haunting Indian exporters in the last two years, which, has seen higher rejection rates and no increase in total number of visas, from the existing 65,000 at present.
“A greater number of staff will have to execute projects out of India if this comes into effect,” said Sanjoy Sen, Senior Director, Deloitte, in India.