Software companies which are yet to figure out the business impact of the US Immigration Reforms Bill are, however, discussing contingency plans with clients as the proposed law could be detrimental to the $100-billion industry.

The companies could see their cost of operations go up significantly as the Bill, passed by the US Senate and before the House of Representatives, proposes higher visa costs and increase in wages for H-1B visa holders. Analysts tracking the software industry think clients may delay their decision-making this quarter due to the reforms. Companies may also hire more onshore consultants in the US to offset the potential impact of the proposed Bill.

Joint action plans

S. D. Shibual, CEO, Infosys, said that clients do understand that the reforms are an industry issue. We have been talking to clients to avoid service interruption, he said. “This requires a joint action plan between the client and us,” he said.

“We do not know what shape the final bill will take. At the same time, we are creating contingency plans with clients,” he told analysts while discussing the company’s second quarter financial results. Tata Consultancy Services is also engaged in a similar process, according to its CEO N. Chandrasekaran. It is closely tracking the developments to present its point of view and working on the various scenarios that could arise, including a wage increase, local hiring or a ‘combination of the resource pool,’ he told analysts.

‘Too early’

Wipro’s CEO T.K. Kurien told analysts, he did not “think customers are actually cutting back spending looking at the Bill. There is no change as of now.” Despite some concerns, customers are not worried. It is too early to decide which way the immigration bill would go, he said.

Gordon J. Coburn, President, Cognizant Technology, said that discussions are on.

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