No cut in H-1B visas for Indians: US Consul-General

There is no cut in H-1B visas for Indians, US Consul-General for Hyderabad, Cornelis M Keur, has clarified. While the US Government had made it clear that companies give preference to Americans in employment as the jobless rate had risen to 9 percent in the wake of the recession, there had been no significant change in the H-1B visa policy, Keur maintained.

In a programme organised by the Press Club, he described as misconceived the notion that H-1B visas were detrimental to jobs for US nationals.

Raising the cap on H-1B visas would help promote economic growth by bringing in extraordinary and boosting competitiveness, he said. However, the slowdown had meant that companies receiving funds under the US Government’s bailout package would have difficulty hiring H1B workers.
However, students with requisite skills were still attractive for US employers.

Many had also interned with US companies who were now sponsoring them for their H1Bs, he said.

“There are three million Indians in United States who are contributing to its prosperity,’’ Keur said, and also made special mention of the Telugus who have made a mark in various fields besides IT.

Keur said that the Hyderabad Consulate General was processing around 350 visas a per day as against the targeted 500. But this would pick up in June once the new staff were trained by the experienced hands who had been brought in from Chennai and Delhi. There were one lakh students from Andhra Pradesh pursuing higher studies in the USA and demand was likely to increase, he said.

On students and professionals from India being at risk from violent crime, Keur pointed out that nationals of other countries also faced such hazards and that the US administration was taking steps to curb the menace.
Press Club President GS Vasu and General Secretary Ravikanth Reddy were present.

US consulate denies H1B visa curtailment for Indians

The US Consulate on Wednesday denied any curtailment of H1B visas to Indians. "Due to economic slowdown world over, the US Government has taken a decision to tie up its unemployment problem which is nine per cent. But, there was no significant change in visa policy," US Consulate General, Hyderabad, Cornelis M Keur said.

"We continue to issue H1B visas with little more scrutiny", Keur told reporters at 'Meet the Press' programme organised by Press Club Hyderabad.

At the same time, the US Government has framed a policy for the companies to give preference to native Americans in employment, he added.

Obama administration has taken up a practical approach in establishing relations with the countries while there were efforts for strengthening relations with India because of the "Brain Borrowing", he said.

Making a special reference about the Andhraites whose presence can be marked in various fields in the US including IT, Keur said, "there are three million Indians in United States who are contributing to its prosperity."

The Hyderabad Consulate, the fourth in the country, was established due to the growing trade and development in the State in the fields of IT, Pharma and Biotechnology, he added.

Cognizant strikes partnership with Temenos

NASDAQ listed IT services provider Cognizant has signed a global strategic partnership with Temenos, a Swiss banking software company, to enhance service and delivery capabilities for Temenos’ core banking product T24.

Typically, implementing a banking software solution involves an IT and business consultant who work with the client on system integration and management. Temenos, whose core competency lies in banking software development, will be able to offer implementation services to its global clients, who would otherwise employ an IT consultant for the purpose. Cognizant and Temenos will work together on projects, but the latter will maintain the content and IP.

US shouldn't kill hi-tech talent: Steve Ballmer

Microsoft chief executive Steve Ballmer provided a window into his family’s immigrant past to make a case for America keeping its doors wide open to allow the best and brightest to work in the land of opportunity.

The son of a Swiss immigrant father and a Jewish-American mother, the 53-year-old evoked the example of his parents as he spoke of his unease with the protectionist measures that are being planned by the new Obama administration.

“My father was an immigrant right after World War II when he went to work for the US Army as an interpreter in the Nuremberg war crimes trial. And then he met Americans in the army who sponsored him to migrate to the US in 1949,” Mr Ballmer said in an interview to ET on Tuesday.

“We are prepared to participate in broader immigration reform which allows us to bring hitech talent. My father, my mother’s parents were all immigrants. It’s a great thing for the US,” he said in response to a question about the brouhaha over H1B visas.

American companies having overseas operations are worried about President Barack Obama’s proposed taxes on income earned abroad, and India’s top tech firms such as TCS, Infosys and Wipro are anxious about rising anti-offshoring sentiment in the US.

Ballmer said his initial reaction was that such tax proposals are not good for business and that his company would continue to hire skilled professionals in countries such as India and China if Microsoft is unable to employ them in the US.

Microsoft, which was criticised by US Senator Chuck Grassley for retaining and hiring more foreign workers even as it announced plans to lay off around 5,000 employees, is one of the biggest users for H1B work permits issued by the US to skilled migrants from countries such as India.

“We opened a development lab in Vancouver of Canada because we could not get visas for everybody, and the Canadians were willing to give visas,” Ballmer said. “If the US government allows us, we will have those people to work for us in the US, but if the government does not allow us, we are prepared to have those people work elsewhere, whether it be here in India or in China.”

Regarding President Obama’s plans to tax overseas earnings of American companies to create more local jobs, Mr Ballmer said he would wait for more details. “I think the government have to be thoughtful because there are unintended consequences: will their actions create jobs in the US, or will they tend to drive even more jobs out of the US. In general, business is saying this is not a good thing,” he said. Ballmer, who had offered to buy Internet search rival Yahoo last year to compete with Google, said Microsoft is seeking to develop its own technology for search.

“People still speculate, but I have made it clear: they turned down our offer, it’s fine and we will move on. The truth is in this economic

condition I am glad they did not accept the offer of $33 (per share). They might be sad they did not accept an offer for $33, but we crossed the bridge and now we are exploring other opportunities,” he said.

Despite enjoying a near-monopoly in the computer desktop market, Microsoft still lags behind Google and Yahoo in Internet search. And open source software Linux, which is available for free downloads, also continues to put pressure on the company.

“We have competition from this funny thing called Linux, which does not even require it to be successful. In a sense we have all the best and the worst of competition; we have a competitor that’s going to keep competing whether it’s successful or not because it does not require financial resources, it’s keeping our prices down.” Ballmer, however, added that Microsoft would be open to work with Yahoo and create a stronger offering for those currently spending on advertising with Google.

“We are not going to acquire them but are open to work together. We and Yahoo together will be stronger. Everybody who advertises on Google in the US and elsewhere would like to advertise on a combination of Yahoo and Microsoft,” he added.

US adds “fraud prevention tactics” rule to H-1B visa for Indians

US tightens H-1B visa rules for Indians
The United States has adopted fraud prevention tactics to prevent misuse of the H-1B visa programmes for highly skilled professionals, after complaints of outrageous abuse by Indian firms, according to a top US official.

According to the US Department of Homeland Security Secretary, new fraud prevention techniques will be used now.

The top most priority of the Obama administration is to provide jobs to the Americans but of late the senator has accused many Indian companies have been accused of misusing this visa system and profiting from it.

The H-1B work visas are for highly skilled professionals and have been most beneficial for IT sector professionals from India.

The US move is likely to hit the Indian IT industry.

On April 23, the US Senate proposed H1B visa legislation, much to the dismay of India’s IT sector.

The country’s third largest software exporter Wipro said the proposal is an antithesis to globalisation and is a restrictive trade practice.

The apex software body Nasscom said though the stated objective of the Bill is to prevent fraud and visa abuse, several of the provisions of this bill are against the principles of free trade and are creating trade barriers.

"In many ways, it is targets Indian companies and restricts their ability to compete in the US marketplace. This is also against President Obama's stand against protectionism at the G20 summit," Nasscom President Som Mittal said.
Source: ibnlive.com

Cognizant pips Infosys, Wipro, TCS, HCL

Cognizant Technology Solutions Corp. has beaten India-based competitors such as Tata Consultancy Services Ltd (TCS) and Infosys Technologies Ltd in terms of incremental revenues for the first time ever in the 12-month period from April 2008 till March.

The firm reported revenues of $2.9 billion (Rs14,413 crore today) for FY09, $600 million more than the revenues in FY08. Adjusted for two small acquisitions, the incremental revenues stand at $558 million.

This is higher than the incremental revenues of $487 million reported by Infosys and the $310 million (adjusted for acquisitions) reported by TCS. For perspective, these two companies are 1.6 times and 2 times the size of Cognizant, respectively. Wipro Ltd’s information technology (IT) services division, 1.5 times the size of Cognizant, reported incremental revenues of about $530 million after adjusting for revenues added through acquisitions.

HCL Technologies Ltd, which makes up the top five in terms of IT outsourcing work to India, reported incremental revenues of $220 million on an organic basis.

Cognizant 1Q Profit Up 11%; Gives Solid 2Q View

The information technology and consulting company said earnings climbed 11 percent to $113.1 million, or 38 cents per share, from $101.9 million, or 34 cents per share, in the year-earlier quarter.

Adjusted to exclude one-time stock-based compensation and tax costs, the company's profit came to 41 cents per share. Analysts, who typically exclude special items, expected 37 cents per share, according to a Thomson Reuters poll.

Sales also beat out expectations, up 16 percent to $745.9 million, compared with the average estimate of $734.3 million. The company said economic uncertainty has bolstered demand for consulting "as our clients face fundamental structural changes within their industries."

H1B Cap : Latest Update

First Count : April 9, 2009 - 42,000 and 20,000
The USCIS issued the first cap count on April 9, 2009. As of that count, approximately 42,000 H1B petitions had been received under the “regular” cap. While the 20,000 advanced degree limit had been reached, USCIS indicated that some more advanced-degree cases would continue to be accepted, to allow for normal rates of denials and withdrawals.

Second Count : April 13, 2009 - 43,000 and 20,000
The next count was issued April 20th, for cases filed through April 13, 2009. As of that date, the USCIS had received 43,000 regular cap cases. Additionally, advanced-degree cases were still being accepted due to the expectation that it is normally necessary to accept some percentage more than 20,000 cases to end up with 20,000 H1B petitions with approvals.

Third Count : April 20, 2009 - 44,000 and 20,000
The count for April 20, 2009 reflected an additional 1,000 regular cap filings in the week following the previous count. The advanced-degree cap filings must have been very light, as the USCIS had still not reached the limit for those cases.

Fourth Count : April 27, 2009 - 45,000 and 20,000
The fourth count was issued April 27, 2009. As of that date, approximately 45,000 regular cap cases had been received by the USCIS. Advanced-degree cases were still being accepted.

Conclusion
Regarding the H1B cap, FY2010 was very different from the couple of years immediately preceding. This is driven primarily by the economy. It appears to be a clear indication that the request for H1B workers is largely self governing, and that, when the job market is depressed, the H1B filing levels drop accordingly. Critics of the H1B program, who claim that the H1B numbers should not be increased, are incorrect in their assessment, as the supply-and-demand cycle seems to be working again with H1B filings greatly reduced due to the decrease in demand, even for highly skilled workers.

US visa move raises protectionism fears

Source: ndtv.com

For all those seeking to find a job in the land of opportunity, protectionism may be eating into their dream and aspirations. In what could turn into a bitter ruling for overseas job seekers, two US senators have introduced a bill seeking to reform H1B visa procedures that would make it harder for companies to hire non-Americans.

Most importantly, the bill puts an onus on employers to prove that they had tried to recruit an American citizen before hiring an H-1B, which wasn't the case before. It also prevents companies who have a majority of H-1B employees on their payroll to hire any more.

The bill says that the employers must first make "good-faith attempt" to recruit a qualified American worker. It prohibits advertisements for only H-1B employees and also says that a company cannot hire more H-1B workers if 50 per cent employees are under the same category.

Moreover, it seeks the labour department to have more authority to investigate abuse.
However, Nasscom says it is surprised because it was in touch with people in the US Congress and administration.

“What really impacts us is the one that prohibits Indian companies from getting H1 and L1 visas. From our perspective this is targeting Indian companies. It’s protectionist in nature and it would prevent Indian companies to compete in the US markets,” Som Mittal, President of Nasscom said.

The Indian companies earned nearly $47 billion from the export of software and services around the globe during fiscal year 2009. The industry leaders say while they agree with stricter measures, the move should not be protectionist.

Suresh Senapaty CFO of Wipro, said, “There are two aspects—one is to remove the anomalies of the existing law to stop misuse and we completely support that. But if it is to promote protectionism policies, then it is against what all the leaders agreed in G20 including president Obama.”

Well, American President Obama has promised to talk comprehensively on immigration reform in May.

The US issued 85,000 visas under the H-1B category during the last financial year, of which Indian companies got 12,500. Now, getting one of these going ahead would become tougher, especially if such bills get passed.

Don't see new H1B proposal turning into an Act: NASSCOM

US lawmakers have introduced a new bill with additional restrictions on H1 B visas. Ganesh Natarajan, Chairman of the National Association of Software and Services Companies (NASSCOM), said if this proposal passes in the current format then it will have a fairly disastrous impact on the IT sector.

“But I am hopeful that over the next three-months we will not see this really becoming an Act.” Meanwhile, Commerce Minister Kamal Nath said he is concerned by the contents of H1B visa bill by Senator Durbin and Senator Grassley. "The bill will restrict the ability of Indian IT companies to compete in the US market place. The bill is not in line with US President Barack Obama's stand against protectionism at the G20 meet and not in line with our desire to mainstream development in the Doha negotiations."

Just 44,000 H1B petitions received so far: USCIS

As against the Congressional mandated per annum quota of 65,000, the US Citizenship and Immigration Services (USCIS) has received just 44,000 H-1B petitions in the first three weeks after the American agency started accepting applications for the most sought work visas for highly skilled professionals.

Professionals from India, specially those from the IT sector, have been benefitted the most.

But because of the certain provisions in the stimulus package which prevents American companies, having received federal grant money, from hiring overseas highly skilled workers, not many companies are willing to apply for the H-1B visa petitions this year.

"USCIS has received approximately 44,000 H-1B petitions counting toward the Congressionally-mandated 65,000 cap. The agency continues to accept petitions subject to the general cap," USCIS said in a statement Monday.

Although it has received 20,000 petitions in the advanced degrees categories, the USCIS said it would continue to accept advanced degree petitions since experience has shown that not all petitions received are approvable.

"Congress mandated that the first 20,000 of these types of petitions are exempt from any fiscal year cap on available H-1B visas," the USCIS said. "For cases filed for premium processing during the initial five-day filing window, the 15-day premium processing period began April 7.

"For cases filed for premium processing after the filing window, the premium processing period begins on the date USCIS takes physical possession of the petition," it said.

Cognizant in talks to buy UK firm Pa Consulting

Cognizant Technology Solutions, which backed out from Satyam bidding at the last moment, is in talks with London-based Pa Consulting for a buyout deal valued at $300-350 million. The preliminary discussions with the privately-held technology-led consulting firm come even as Cognizant is actively scouting for acquisitions in the European market, sources said.

Cognizant is looking to strengthen its presence in the UK and Continental Europe, from where the company gets 20% of its revenue pegged at $2.89 billion. When contacted, Cognizant CFO Gordon Coburn said in an email response, “We do not comment on speculation in the marketplace.” At the same time, Pa Consulting said, “It is not our policy to publicise or discuss in the media any alliance or partnership arrangements, and we have no comment to make.”

Silicon Valley pushes for H1B visas

Reflecting the mood of the Silicon Valley, prominent media outlets from California have come out openly in support of the H-1B work visas and opposed increasing the "hire Americans" call in the United States.

"The H-1B program is good for California and good for the country," wrote San Francisco Chronicle in an editorial today.

Speaking out against the provision of the stimulus bill that blocks H-1B hiring by companies, which have received federal money, the newspaper asked the two Californian Senators, Barbara Boxer and Dianne Feinstein, to work towards reversing this provision.

"This is more than just a political debate," it argued. "The H-1B program, though small in relative numbers (new H-1B visa holders represent just 7 out of every 10,000 workers in the United States, according to the National Foundation for American Policy), has real impacts on our economy and our society," the newspaper said.

"Foreign students and workers who might prefer to stay in the US can, and increasingly will, return to their home countries to launch businesses. They can then compete with American companies instead of adding value to them. And when they return home, they can honestly say that America is not the land of opportunity for people like them," it said.

In another column, CEO and president of Sybase Inc John Chen wrote in Mercury News that "Hire American" is a slogan which does not help America.

The situation in the country would only worsen, Chen said, as the stimulus package discourages bailed-out financial services firms from hiring H-1B visa holders.

"We simply won't have enough labour down the road. The US Labour Department predicts a net drop of 3.1 million in labour supply comparing the period of 2006-2016 to the prior decade. What all this means is that hire American will only harm America," he wrote.

Only 42,000 H1B petitions received in first week

For the first time in several years, the US has received only 42,000 petitions against the mandated cap of 65,000 for H-1B work visas, much sought after by highly-skilled professionals including Indians, a week after it started accepting the applications.

This is a far climb down from previous years when the US Citizenship and Immigration Services (USCIS) had received several times the Congress-mandated quota and it had to resort to a lottery system to decide fate of successful applicants.

"USCIS has received approximately 42,000 H-1B petitions counting toward the Congressionally-mandated 65,000 cap. The agency continues to accept petitions subject to the general cap," USCIS said in a statement issued yesterday.

However, USCIS said it has received approximately 20,000 petitions, full quota, in the advanced degrees category. "We continue to accept advanced degree petitions since experience has shown that not all petitions received are approvable." Congress mandated that the first 20,000 of these types of petitions are exempt from any fiscal year cap on available H-1B visas.

Cognizant to kick off operations in Kolkata

IT biggie Cognizant will kick off operations at its second IT services unit in Kolkata before September. This was indicated by a senior West Bengal IT department official.

Cognizant founder and vice chairman N Lakshmi Narayanan met West Bengal chief minister Buddhadeb Bhattacharjee at Writers' Buildings to discuss the progress of the company’s second IT unit in the city.

Talking to newsmen after the meeting, the Cognizant VP said, "Work at the Bantala unit is progressing according to plan."

Cognizant is setting up its second IT and business process outsourcing (BPO) services unit in Kolkata with an investment of close to Rs 188 crore. This is expected to sharply raise Cognizant's footprint in Kolkata with the addition of over 5 lakh sq ft of office space that may accommodate nearly 4,000 new employees.

The new fully-owned techno-complex will come up on 20 acres in the Bantala IT SEZ. In this light, the state government official said, "Cognizant’s second unit will be operational before the Pujas. It will have a capacity to accommodate some 4,000-to-6,000 people. This will be enhanced to 16,000 subsequently."

At present, out of its 44,000 global workforce, around 33,000 are at the India development centres spread across eight cities, including Chennai and Bangalore.
In addition to this facility, Cognizant will continue to lease additional facilities in Kolkata to meet its headcount growth requirements, according to a company press release.

Cognizant has around 4,000 professionals in Kolkata focussing on segments such as financial services, pharmaceuticals, retail, enterprise resource planning and customer relations.

Cognizant agrees to pay back-wages to H-1B visa employees in US

Software services provider Cognizant said it has agreed to pay $509,000 as back-wages to 67 employees who went on H-1B visa to the US, after the US Labour department asked it to do so.

This comes to about $75 a month for these 67 employees over the eight years in question. Between 2001-2008, Cognizant had 40,000 people in the US, including whose who went on H1-B visas.

In a release, the department said its Wage and Hour Division found that Cognizant did not comply with regulations related to paying computer professionals hired under the H-1B program the proper wages, failed to offer all H-1B workers equal benefits or eligibility for equal benefits, and failed to maintain required records.

H-1B is a professional visa and usually given for three years and extendable for another three, so it is effectively a six-year visa. IT companies vie for the majority of H-1B visas.

The Department of Labour reviewed all of Cognizant’s LCA or labour condition applications from 2001 to 2008 through a process launched a couple of years back.

“During the 8 years in question when Cognizant had over 40,000 employees at Cognizant US, it was determined that we had unintentionally differed from the H-1B required wage level in just 67 cases, or a meager 0.17% of our employee wage payments. Cognizant believes that these 67 individuals were already paid at or above the required wage, but to avoid any doubt, we are immediately paying back wages to them. Communication to that effect has been sent to the associates concerned,” Cognizant spokesperson said.

Issues over H-1B visas are not new to the IT industry. During the year ended March 31, 2008, Infosys voluntarily settled with the California Division of Labor Standards Enforcement toward possible overtime payment to certain employees in California, USA, for a total amount of Rs 102 crore ($26 million) pertaining to the last three years.

In June 2007, Patni Computer Systems agreed to pay more than $2.4 million to settle US federal allegations that 607 employees hired by the India-based technology services company to do computer work in 32 states in 2004 and 2005 were not paid prevailing local wages.

“Cognizant Technology Solutions has taken immediate steps to correct all identified violations and ensure future compliance,” said Joseph Petrecca, director of the Wage and Hour Division’s Northern New Jersey District Office. “This level of cooperation sets a standard for others in the industry.”

Given the increasingly protectionist tone in Washington, wages to H-1B employees are an important issue in outsourcing, especially at a time when the economy is shrinking and people are losing jobs. Traditionally, one of the key grouse of the anti-outsourcing lobby is that foreigners ready to accept low wages take away American jobs.

Cognizant, Pepsico among 50 best US cos: BusinessWeek

Cognizant Technology Solutions and Pepsico, both led by India-origin people, have found a place in the list of 50 best American corporates compiled by the BusinessWeek magazine.

IT major Cognizant ranked at the 31st spot is led by Francisco D'Souza, while snacks and beverages firm Pepsico, which is at the 40th spot, is headed by Indra Nooyi.

The league of 50 best corporate performers is topped by healthcare entity Gilead Sciences. CF Industries Holdings, which is into materials sector, and energy firm Diamond Offshore Drilling are at second and third spots, respectively.

Both Cognizant and Pepsico have slipped from their last year's 19th and 31st positions, respectively. However, Pepsico's rival Coca-Cola is at the 26th spot, improving its position from the 45th rank last year.

At fourth place is Windstream, which is into telecommunication services, followed by Colgate-Palmolive (5th), Robinson (CH) Worldwide (6), Exelon (7), Microsoft (8), Best Buy (9) and Mastercard (10).

The ranking is based on two core financial measures, average return on capital and growth, both taken over the previous 36 months.

iPhone maker Apple (15th rank), telecom firm Verizon Communications (21st) and Internet search giant Google (35th) are also part of the list.

About Cognizant, the publication said the company seems to defy gravity.

"CEO Francisco D'Souza has appointed 700 relationship managers to work closely with the company's 500 clients, enabling Cognizant to track their needs and respond quickly to shifts in demand. As a result, 90 per cent of the company's revenues come from repeat business, which keeps selling costs low," it said.

The magazine said Pepsico which has sales worth USD 43.3 billion, has been on a marketing and repackaging frenzy.

The company is "replacing its old Gatorade labels with a giant "G," shorthanding Mountain Dew to "Mtn Dew," and giving Pepsi itself a simpler logo reminiscent of the Obama "O" campaign logo," the publication noted.

"... Pepsi still faces a slog selling soda to Americans who drink less of it. But CEO Indra Nooyi is betting that new advertising and innovation will keep sales fizzing," it said.

BusinessWeek said the 13th annual ranking of the companies shows that "innovation is still alive and well vital, even among America's largest companies".

"To arrive at the BusinessWeek 50, we run data screens on all of the companies in the Standard & Poor's 500-stock index, focusing on sales growth rate and return on invested capital.

"All the companies are measured over time, to reward sustained performance, and compared against other companies in the same sector...," the magazine said.

Domestic IT cos may seek fewer H1Bs this year

Source: The Hindu Business Line
An uncertain business outlook coupled with pressure to trim onsite workforce as clients ask for price cuts could prompt Indian outsourcers to apply for lesser number of HI-B visas for 2009.

The H1-B programme allows US companies to bring in foreign skilled workers when such skills are in short supply. The US Citizenship and Immigration Services (USCIS) will take H1-B applications for the next fiscal from April 1-7.

“I would think so: the number of applications will be substantially lower,” said Mr Ganesh Natarajan, Chairman of Nasscom, the apex industry body of software services companies, stating that it would be difficult to put a figure. “The duration for receiving applications is expected to be longer,” he said.

The USCIS recently said that it would continue to accept applications beyond the five-day stipulated period if it does not receive adequate number of applications to meet the annual cap of 65,000. Generally, the quota gets exhausted within the first two days.

H1-B recipients
Though Indian firms have been among the top H1-B recipients, they do not disclose the number of applications filed. In 2008, four of the top five H1-B recipients were Indian IT firms – Infosys Technologies, Wipro, Satyam and TCS, while the fifth was Microsoft. Infosys topped the 2008 list with 4,559 visas followed by Wipro (2,678), Satyam (1,917) and TCS (1,539).

“We will apply for H1-B based on our business requirements. It will be lesser than last year,” an official of a large IT services firm said.

Shrinking volumes
Faced with shrinking volumes and with new business hard to come by, as US customers reel under the impact of the economic crisis, Indian IT companies have resorted to reducing their onsite workforce in recent months.

“I don’t see that rush to grab visas this year,” said Mr Avinash Vashistha, CEO of Tholons Inc, an offshore advisory firm that helps clients with their outsourcing strategy.

Explaining why there could be a drop, Mr Vashistha said the Indian vendors are increasingly looking at a business model that’s not dependent on visas and includes hiring local workforce and in near shore locations.

Lower costs
Also, these vendors are keen on moving work offshore while agreeing to client requests for price cuts. Further, companies have significantly reduced their staff augmentation because of the availability of skilled resources locally, Mr Vashistha said.

Applying for lesser number of visas would mean lower costs and that would have a positive impact on their first quarter margins, said Mr Harit Shah, analyst at Angel Broking Ltd.

“The chances of getting a visa could be higher this year as the number of applications would be less and the smaller companies could benefit,” Mr Natarajan said.

MindTree CFO, Mr Rostow Ravanan, said the company’s business model uses less US visas and that they would be applying for fewer H1-B permits this year.

Infosys, Cognizant buck trend; move up in global 3000 list

On January 1, 2008, when the US credit crisis was making its impact felt, top Indian tech companies such as Tata Consultancy Services (TCS), Infosys, Wipro, HCL Tech and Cognizant were a part of the elite list for the 3,000 top global companies headed by firms such as Exxon Mobil, Petrochina, Wal-Mart, P&G and Microsoft, based on their market capitalisation.

Fifteen months later when the financial world has seen many big names cease to exist and stock prices fall - two Indian tech companies have managed to move up the pecking order while other Indian tech firms have fallen by the wayside, according to Bloomberg data collated by Edelweiss Research.

Although they too have lost over 40% of their market values, Infosys and Cognizant have braved the financial storm 'better' than their domestic counterparts and are ranked 341st and 888th respectively. Infosys was ranked 409th while Cognizant was 1069th in January 2008. Compare this to TCS which moved down from 384th to 519th rank and Azim Premji-led Wipro losing 212 places to stand at 797th. Shiv Nadar-led HCL Tech is out of the top 3,000 list currently but occupied 1,729th rank in January 08.

"This could have implications for global portfolio allocation strategies in case Indian IT firms are found to have made rapid strides in the market cap pecking order...significant part of improvement in rankings for Infosys and Cognizant came in only after the Lehman bust," Edelweiss IT analyst Viju George said.

Purely looking at the global tech sector list, which comprises about 260 names in the pan-sector top 3000, results show that Cognizant has improved its ranking within the global tech portfolio while Infosys has held on. Indians can take heart from the fact that Infosys' ranking in the tech group is 25 (unchanged from that in January 2008) while Nasdaq-listed Cognizant has clinched the 65th position, moving up from 83rd earlier. Others desi tech firms have slipped on the global tech 260-list also with TCS at 35th (24th earlier), Wipro at 58th (previously 38th) and HCL Tech out of list (was 138th earlier).

The two companies that have fared the best in the top 25 are IBM and Accenture. IBM's market cap has taken the least hit (of those in the top 25 list) while Accenture's ranking has jumped the most (8 places to occupy slot 14 up from 22 in January 2008).

Some analysts feel the downside of tech stocks is limited, especially with many right-sizing the workforce. "With wages forming 50%+ of revenues and currency moving favourably, ability of Indian techs to manage margins cannot be questioned. However, margin defence can at best prevent stock downside, in our view, as the topline prognosis continues to worsen," IT analyst Bhavtosh Vajpayee of CLSA Asia-Pacific Markets said.

Cognizant dispenses heavy bonus during recession

Some good news from the IT sector at last! Cognizant, India’s fourth largest software services company in terms of revenue and staff strength, is riding against the tide to hand out handsome bonuses to employees across the board.

The IT major, which has most of its facilities in Chennai and Bangalore, is paying employees the full variable pay component this year at a time when tech giants such as Infosys and TCS as well as tier-II players like Hexaware are in the process of implementing paycuts or even laying off staff.

Most Indian tech companies pay employees 20-35% of their gross as variable pay with senior executives some times getting over 50%. TOI spoke to several Cognizant employees who said they had received a bonus. In some cases, the amount is the full component of the variable pay, which varies according to seniority.

Among top five IT companies in India, Cognizant ranks fourth both in terms of revenues ($2.8 billion) and headcount with nearly 62,000 employees.

“It’s a relief to be receiving this bit of news in the current scenario. There has been a lot of talk from the industry that pay cheques will be revised downwards, we had also heard about lay-offs,” an employee said.

Confirming the development, a company spokesperson told TOI, “Cognizant has paid good incentives for the year 2008 in keeping with our philosophy of sharing the results of good company performance with our associates. As compensation is confidential information, we cannot reveal any further details.”

Cognizant reported a 32% rise in revenue for the fiscal year ended 31, December 2008 and ended the period with over $900 million in cash. Most Indian tech companies follow the April-March fiscal calendar.

Last year, Cognizant paid between 70 and 100% and in some cases employees exceeding the highest expectations were paid even more than 100% of their promised variable pay.

A few days ago, Tata Consultancy Services, which pays around 8% of gross revenues every year to staffers in the form of performancelinked variable pay, said it would review the variable pay component.

Infosys has also indicated that it would pay lower discretionary pay to senior management level personnel due to the economic slowdown. Hexaware Technologies has cut salaries of about 350 employees on the bench and salary cuts between 2-10 % will be effected for employees above a certain designation.