Tuesday, 09 May 2017 07:01

Cognizant revenue rises as H-1B review gets underway


Large-scale professional services offshorer Cognizant Technology Solutions has announced a 10.7% rise in revenue for the first quarter of the financial year to US$3.55 billion.

The rise comes even as the company is under scrutiny by the Trump administration for its use of H-1B visas.

The White House has targeted Indian outsourcing firms Infosys and Tata Consultancy Services and Cognizant — which has most of its employees in India — as potential targets in a crackdown on H-1B visas, according to The Wall Street Journal.

During the announcement of its results in the US on Friday, Cognizant president Rajeev Mehta said on a call with analysts that the company was applying for fewer H-1B visas and aiming to ramp up hiring in the US.

Asked whether this would affect future earnings, Mehta told iTWire on Monday that the company had hired 4000 US citizens and residents in 2016.

"In 2017 and beyond, we expect to significantly ramp up our US-based workforce by hiring experienced professionals in the open market and by making more use of university, veteran, and related programmes," he said.

Infosys has already said that it will be hiring 10,000 Americans over two years in the wake of the announcement of a review of the H-1B visa system.

Mehta said: "We are shifting our workforce largely in response to clients’ increasing need for co-innovation and co-location. While we will still seek visas for highly specialised and skilled talent, we’re reducing our dependence on these visas.

"In fact, during the most recent filing period, on 1 April, we applied for less than half the number of visas we sought last year. And we expect to further reduce our need for these visas going forward."

The number of applications for H-1B visas fell for the first time in four years this year, as per figures from the United States Citizenship and Immigration Services.

"As part of our shift, we continue to expand our US delivery centres. A good example is our Tampa delivery centre, where we employ over 1000 technology and business professionals," Mehta said.

"They provide business process services, application services, and testing for financial services and healthcare clients. At our centre, we’re employing a broad skill mix that includes long-time local residents as well as veterans and recruits from local colleges.

"At similar delivery centres around the country, we’ve expanded our retraining programs and are working with local institutions to implement special curriculums that will help us meet growing client needs."

Mehta said Cognizant had more than 20 US delivery centres, "and we continue to expand this footprint. We are executing the shift to digital at scale by helping our clients simultaneously optimise their costs as they invest in the future. And we are shifting our workforce rapidly in the US with more US jobs and US delivery centres."

He said the company had been ramping up its recruiting efforts in the US for a number of years and thus there was no material increase in recruiting costs.

"Increases in recruiting costs are partially offset by lower immigration-related costs, such as visa and relocations fees. Cost isn’t as big a challenge as the availability of talent.”

Cognizant said it expected full-year revenue to come in within the range of US$14.56 billion to US$14.84 billion, with second-quarter revenue expected to range from US$3.63 billion to US$3.68 billion.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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