U.S. markets closed
  • S&P 500

    +112.50 (+3.06%)
  • Dow 30

    +825.43 (+2.80%)
  • Nasdaq

    +360.97 (+3.34%)
  • Russell 2000

    +66.90 (+3.91%)
  • Crude Oil

    -0.28 (-0.32%)
  • Gold

    +3.40 (+0.20%)
  • Silver

    +0.01 (+0.03%)

    +0.0157 (+1.60%)
  • 10-Yr Bond

    -0.0340 (-0.93%)

    +0.0153 (+1.35%)

    -0.4680 (-0.32%)

    +739.53 (+3.78%)
  • CMC Crypto 200

    +15.47 (+3.47%)
  • FTSE 100

    +177.70 (+2.57%)
  • Nikkei 225

    +776.42 (+2.96%)

Asia IT Giant’s CEO Warns Trump’s Visa Curbs Will Cost U.S.

·3 min read

(Bloomberg) -- The chief executive officer of Asia’s largest IT services firm warned that a U.S. freeze on thousands of employment visas will only raise costs for American corporations like Wall Street banks, auto manufacturers and drugmakers.

Tata Consultancy Services Ltd. CEO Rajesh Gopinathan told Bloomberg News the move has put massive stress on a huge swath of Indian-born engineers that have lived in the U.S. for years and helped support American clients, who will ultimately be the ones hurt most. His remarks were among the strongest public rebukes from India’s $181 billion IT industry since U.S. President Donald Trump’s June decree to halt approvals for a range of visas until the end of the year -- including those for intra-company transfers.

TCS and peers like Infosys Ltd. have relied for years on the ability to send talent to work alongside their customers overseas, which include some of the largest electronics manufacturers and global retailers. Investors worry that the inability to do so will hurt their competitiveness in the largest international market.

“The ignorance around this ruling should be addressed,” Gopinathan said via video conference on Friday. “Playing with the status of people who’ve moved away from families and committed to spending five-six years in a foreign country without immigrant status to deliver value to customers, is a short-term gimmick,” the executive said.

Read more: Tata Consultancy Profit Misses as Lockdowns Snarl Services

On Thursday, TCS reported profit below expectations after the Covid-19 pandemic disrupted operations of its clients from Wall Street banks to Silicon Valley tech giants. The visa curbs had no material impact on TCS’s own business but will certainly upset its workers, Gopinathan said. “The attitude towards us in a country where we contribute significantly is unexpected and unfortunate.”

Before the onset of the pandemic, TCS and the rest of India’s 4-million-workers-strong IT services industry faced pressure from structural industry changes. With the rise of artificial intelligence and automation, companies had to retrain thousands of workers and invest in new cloud- and software-based services to address clients’ evolving needs. Trump’s visa ban last month has added a further layer of uncertainty.

“We invest in skills and make this talent available in a fungible manner for use by customers,” Gopinathan said from his office in Mumbai’s business district. This helps clients avoid “large fixed costs to have access to this kind of talent.”

The investment by TCS and its peers helps American firms tap a pool of talent that’s continuously adapting to new technology, he said, adding he continues to work from the office because it’s close to his home and offers the familiarity of old work routines.

Gopinathan started his career at TCS in 2001, becoming chief financial officer in 2013. He took over the helm in 2017 when his predecessor was promoted to restore stability at conglomerate Tata Group after a bitter boardroom coup. Gopinathan has presided over a doubling in TCS’s market value since, a reflection of the corporation’s effort to pivot to newer services.

TCS has seen a surge in demand for its services from clients enhancing their digital infrastructure and accelerating cloud migration to cope with Covid-19. “Overall, the pandemic has hastened the move towards distributed infrastructure,” he said.

(Updates with additional details of industry and pandemic fallout from sixth paragraph)

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.