Wipro's ADRs halved because while markets are indeed informationally efficient they are still made up of human beings and rumours and panics can and do spread among us at times. Nothing more than that.
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Arpita Mukherjee, Avantika Kapoor Finance, Providing enough employment opportunities in India with a population of 1.34 billion is not easy. And the fact that half of the population is below the age of 25 and will soon enter the job market will only make matters worse. In response, the government has come up with initiatives such as ‘Make in India’, ‘Skill India’ and ‘Start-up India’ to promote employment. But the 2015–16 Annual Employment and Unemployment Survey found that the labour force participation rate (LFPR) nationally was only 50.3 per cent. And the LFPR is much lower for females than for males. The survey shows sluggish employment growth and the growth varied across sectors. While sectors such as IT have seen growth, other sectors such as jewellery, automobile manufacturing and transport have seen a decline in employment in recent years. In India, agriculture accounts for 46 per cent of the workforce, compared to 22 per cent in manufacturing and 32 per cent in services. Despite various policy initiatives, the manufacturing sector has not been able to create mass employment, unlike in countries such as China. Further, casual and contractual employment is replacing permanent jobs in the manufacturing sector. In 2016, India’s unemployment rate was 7.97 per cent, with rural unemployment at 7.15 per cent and urban unemployment at 9.62 per cent. In rural areas, unemployment figures are lower due to the ‘Mahatma Gandhi National Rural Employment Guarantee Act’ (MGNREGA). This act aims to guarantee the ‘right to work’ by providing at least 100 days of paid employment in a financial year to every household whose adult members volunteer to do unskilled manual work. In the Union Budget 2017–18, the MGNREGA received Rs 480 billion (US$7.5 billion). While the act has helped to lower the unemployment rates, it has not been able to tackle disguised unemployment/underemployment. And such programs focus only on unskilled employment. To connect job seekers to potential employers, the Ministry of Labour and Employment launched the National Career Service portal. The portal is a common platform connecting job-seekers, employers, skill providers, placement organisations and counsellors. In the same month as the National Career Service was launched, Pradhan Mantri Kaushal Vikas Yojana — a skill development scheme — was launched by the Ministry of Skill Development and Entrepreneurship to help young people learn industry-relevant skills and enable them to secure skilled employment. While these schemes may increase employability through skill upgrading, one of India’s largest employers of educated youth — the IT sector — has begun laying off employees. Companies like Wipro, Cognizant and Infosys have announced that they will downsize. While there was 8.6 per cent growth in the IT sector in the 2016–17 financial year, jobs only grew by 5 per cent, compared with 6 per cent in 2015–2016. This downward trend is predicted to continue, with a 20–25 per cent reduction in growth in employment in the IT sector over the next three years. Industry experts blame this on automation, artificial intelligence and stricter visa norms in key markets such as the United States, the United Kingdom and Australia. Some companies have announced that they will focus on new technologies such as artificial intelligence, rather than concentrating on low-skilled IT jobs. But this technological advancement need not impact job creation — India can instead move towards a knowledge-based economy by focusing on high-value manufacturing and enrolment in quality higher education. Disparity in access to higher education leads to unemployment among the youth. Countries such as South Korea have successfully developed the higher education sector through private participation, while the Singaporean government has launched a program to establish partnerships between domestic and foreign universities to promote tertiary education. India could learn from these examples. Moreover, India needs to change its anarchic labour laws which lead to creation of contractual jobs instead of permanent employment. Retail is a labour-intensive sector, and foreign investment in retail would create jobs in the both retail and related sectors like apparel manufacturing and logistics. Similarly, allowing foreign investment in sectors like legal and accountancy services will create employment as more foreign firms move to India. Infrastructure investment can also be utilised as an engine of job creation. Finally, India needs to sign trade agreements conceding to its partners’ requests to open sectors like insurance, legal services and retail, and in return, bargain for easier work visa norms. With these smarter policies, India can move towards permanent positions in high-value sectors, and need not fear technological advancement or unemployment. Arpita Mukherjee is Professor, and Avantika Kapoor is a Research Assistant at the Indian Council for Research on International Economic Relations, New Delhi. The views expressed herein are the authors’ own.
Swapana Bhosale was stunned when she found out earlier this month she was losing her job at tech services provider Cognizant Technology Solutions in India. “Pulling people out of projects to sack them is unheard of in our industry,” said Bhosale, who demanded to be fired rather than resign so she can take legal action. Cognizant and peers like Infosys Ltd. and Wipro Ltd. won’t disclose how many jobs they cut, but it appears the industry is going through one of the largest retrenchments in its three-decade-plus history.
Cognizant Technology Solutions Corp.'s (CTSH) first-quarter 2017 adjusted earnings of 79 cents per share that beat the Zacks Consensus Estimate of 75 cents.
Eviane Cheng Leidig, University of Oslo In his latest border-closing move, US President Donald Trump issued an April 18 executive order to review the H1-B visa program, which enables educated migrants with specific skills to work temporarily in the US. Silicon Valley was critical of Trump’s move, saying that there is a shortage of qualified Americans working in the industry. US companies, especially those in the technology sector, often employ H1-B visa holders to fill positions that are difficult to recruit for within the country. Beyond hurting American tech companies, the executive order would disproportionately impact one international ally: India. Over 70 percent of all H1-B visas issued each year are given to Indians, and 85 percent of H1-B visas in the technology sector go to Indians. India-based outsourcing companies Tata Consultancy Services and Wipro processed 7,149 and 4,022 H1-B visas, respectively, for American firms in 2014, according to the New York Times. Trump’s executive order follows through on his campaign pledge to “buy American, hire American.” The H1-B review is intended to tackle “fraud and abuse” in the system and may impose greater regulation, such as raising salary thresholds and only awarding visas to the most highly-educated and skilled applicants among those who qualify. Are techies from India over-represented? India-founded firms have an important presence in the US, and many CEOs of Indian origin, including Sunder Pichai from Google, have expressed disappointment with Trump’s policy review. They claim that the Trump administration statement about H1-B visa holders being “cheap labour” that “displace[s] American workers” is inaccurate. And in what seemed to be a response to the executive order, the Bangalore-based Indian technology company Infosys announced on May 2 that it would hire 10,000 American workers in the next two years. Infosys currently employs some 200,000 people in several offices worldwide and plans to open four new hubs in the US “focusing on cutting-edge technology areas, including artificial intelligence, machine learning, user experience, emerging digital technologies, cloud, and big data,” according to a recent press release. The first hub is set to open in the state of Indiana in August 2017. A video portrays the ‘father of USB’ Ajay Bhatt. New Delhi watches silently Trump’s executive order sends a strong signal to New Delhi, which is a strategic ally for the new US administration. Trump has called India a “true friend” to the US. Though Prime Minister Narendra Modi has refrained from discussing the issue publicly, Indian officials have expressed disappointment, saying that US companies based in India will be affected. Members of the prime minister’s cabinet have also voiced concerns. Indian professionals in the US are strong contributors to the American economy, they note, and thus to the global economy. The result of the move, it is hinted, could be a trade war between the countries. The Indian middle class has witnessed a surge of growth and is set to dramatically increase in the near future, nearly a decade after the state’s official adoption of neoliberalism and privatisation. The rise of multinational Indian tech firms such as Infosys, Tata, Cognizant, and Wipro (leading the IT outsourcing Indian industry valued at US$150 billion) have employed a generation of well-educated workers. Other Indian IT professionals migrated to the US, filling, among other positions, a large labour gap in that country’s surging technology market. Indian Americans now represent the second largest diaspora in the US, totalling two million citizens. Indeed, Indian Americans have been depicted as the newest “model minority,” with high levels of education compared to other groups of Americans and above average annual household incomes. A pro-Trump “model minority” A majority of these Indian American citizens identify as Democrats but during the 2016 presidential election, a small and highly visible minority of Republicans emerged. The grassroots initiative “Hindus for Trump” and the policy-oriented Republican Hindu Coalition (RHC) both openly endorsed Trump’s candidacy in the 2016 election. The RHC acts as an advocacy organisation to be the “bridge between the Hindu-American community and Republican policymakers and leaders” on issues pertinent to the US and India, such as trade and political relations, as well as security cooperation on Islamic extremist terrorism. A campaign by the RHC shows Donald Trump speaking in Hindi, echoing Narendra Modi’s election campaign of 2014. Chicago-based industrialist and billionaire Shalabh Kumar, who has been dubbed “Trump’s favourite Hindu,” is the co-founder of the RHC along with the Republican Newt Gingrich, a former congressional leader and presidential hopeful. Kumar, a prominent Trump booster, donated $US1 million to Trump’s campaign in 2016. Recently, Kumar was named by the weekly India Today as one of the top 20 “global Indians,” and has an ear in the White House as part of the Asian Pacific American Advisory Committee and the National Committee of Asian American Republicans. At a February 2017 press conference, Kumar assured reporters that there would be no executive order on H1-B visas and that, to the contrary, the number of migrant workers would increase. He has yet to make a public statement about the Trump administration’s recent decision. This situation highlights the tension Trump has faced at many moments in his young administration: in appealing to his nativist American base, he alienates other key demographics. The H1-B order may turn off wealthy Indian American Republicans, who are potential political and business allies. It could also hurt the US economy. The Hindustan Times says that a significant number of Indians living in the US may now be looking for a job “back home.” Donald Trump has invited Narendra Modi to visit the US later this year. It remains to be seen whether a trip (to, presumably, Mar-a-Lago) will help smooth the H1-B waters between these two “true friends.” Eviane Cheng Leidig, PhD candidate, Center for Research on Extremism, University of Oslo This article was originally published on The Conversation. Read the original article. -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. 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It’s hard to overstate the significance — and complexity — of the H-1B visa system in the U.S. It is the country’s largest guest worker visa program, and an important channel for high-skilled immigration. It allows companies to hire foreign workers for specialized jobs that can be challenging to fill. It has benefited the tech industry enormously, and other sectors, including health care, science, and finance, have also used it to fill gaps in their workforces. But in April, just after U.S. Citizen and Immigration Services (USCIS) conducted its annual lottery for selecting H-1B visas (it received 199,000 petitions for the available 85,000 visas), President Trump signed an executive order that will put H-1B and similar programs under new scrutiny. Titled “Buy American and Hire American,” it directs federal agencies to review whether existing policies adequately prioritize American products and protect American workers. The order is the latest development in a long-running debate over how companies use the H-1B program and how it affects American workers. Much of the dispute surrounds whether companies take advantage of the program to hire foreign workers for lower pay, displacing Americans from those jobs. But it’s important to understand the underlying elements of this debate: one level rests on the heavy use of H-1B visas by outsourcing firms; another rests on the disagreement over whether the program increases companies’ access to scarce skills, or merely helps them minimize costs. The H-1B Visa ProcessThe H-1B visa was established, as part of the Immigration Act of 1990, to let companies recruit trained foreign workers (with at least a bachelor’s degree or the equivalent) to work in “specialty occupations” for which there are few qualified local candidates. The visa allows guest workers to stay at their sponsoring company for up to six years, and it has become an important pathway to gaining permanent resident status in the U.S.; workers who hold the “dual intent” visa can apply for a green card. Spouses and immediate family members of H-1B visa holders can come to the U.S. upon obtaining an H-4 visa. The number of new H-1B visas that can be issued each year is capped at 65,000, with an additional 20,000 available to workers with a master’s degree or higher. Jobs at universities, nonprofit research institutions, and government research facilities are exempted, as are workers from certain countries and any current H-1B holders applying for renewal. Because demand for H-1Bs has exceeded the cap in recent years, visas have been allocated through a random lottery. There were approximately 180,000 new H-1B visas issued in 2016, according to State Department data. Who gets H-1Bs? H-1B visas are granted through an employer-driven system, meaning employers petition the government for visas tied to specific roles. These must qualify as “specialty occupations,” which typically require a bachelor’s degree (or the equivalent) and are found in fields such as science, engineering, information technology, medicine, and business. Companies have to attest that they could not find a qualified American worker for the position and will not pay the H-1B worker less than they would an American — but it’s often said that this hardly functions as a rule and is not strictly (if at all) enforced. There is also criticism that it opens up various loopholes that firms can exploit. For example, as a Kellogg Insight research summary explains: The standards for determining prevailing wages are shaky, and companies can take advantage of loopholes, such as hiring the person through a third-party service. In addition, increasing the supply of workers might drive down everyone’s pay over time because employers have more potential employees to choose from and thus do not have to offer high salaries or raises to attract and retain staff. The program is most often associated with the tech industry, where H-1B workers hold about 12%–13% of jobs, according to a Goldman Sachs report. (For comparison, they hold around 0.6%–0.7% of U.S. jobs overall.) Being able to recruit globally is supposed to help tech powerhouses like Facebook and Amazon find the talent they need. The companies that bring in the most H-1B workers, however, are not Silicon Valley tech firms but IT services firms, many based in India, that specialize in consulting or outsourcing. These companies, which include Tata Consultancy Services, Cognizant, Infosys, Wipro, Accenture, IBM India, and Deloitte, are contracted by other companies to do IT work. According to an analysis by Ronil Hira, a professor of public policy at Howard University, in 2014 nearly one-third of new H-1B visas went to 13 of these so-called “outsourcers.” (Tata received the most visas, with 5,650, while Amazon, the tech company with the highest number, got 877.) Compared with Silicon Valley firms, IT services companies tend to hire H-1B workers for lower-paying entry-level work. For example, Axios reported that 72.4% of Tata’s H-1B visa filings were for jobs paying between $60,000–$70,000 a year. Companies like Amazon, Apple, Facebook, Google, and Microsoft mostly filed for jobs that paid well above $100,000. This difference in pay gets at one of the main criticisms of the H-1B program: Rather than bringing the world’s “best and brightest” talent into the country to work alongside Americans, the system appears to be bringing in cheaper foreign labor that can hurt American workers’ employment and income prospects. It’s a compelling argument: Numerous American IT workers have been laid off (and then asked to train their H-1B replacements) after their employers chose to outsource IT department work instead of keeping it in-house. These decisions by companies have resulted in a few high-profile lawsuits, such as those brought by workers against Disney and Southern California Edison. And a number of studies have found that H-1B workers can have negative effects on American workers, in terms of displacement and lower earnings. On the other side of the debate, H-1B supporters argue that the program brings needed skills into the labor market, which helps firms remain innovative, productive, and competitive. A wealth of academic literature has documented how high-skilled immigrants, particularly in STEM, and including those who would enter the U.S. on H-1B visas, boost the economy by increasing innovation, productivity, and sometimes even employment. It is not exactly easy for many companies to obtain H-1B visas, and members of the tech industry have lobbied Congress to raise the cap on H-1B visas to help meet demand. In 2008 Bill Gates testified before Congress to advocate for more H-1B visas to help compensate for “a deficit of Americans with computer science degrees.” (A bill was introduced in 2015 to raise the cap and liberalize other rules around H-1Bs, but died in Congress.) Companies like Tata, Infosys, and Wipro have also lobbied against restrictions on the program, arguing that their services help corporations become more competitive. More broadly, many tech leaders have emphasized the contributions of high-skilled immigrants to the economy — and have spoken out against anti-immigrant actions like President Trump’s travel bans. Is There a Shortage of Technical Skills in the U.S.? There is mixed evidence about the existence and the extent of a STEM skills shortage. Companies say they struggle to find qualified workers for specialized positions, suggesting there is a shortage of necessary skills. Some experts say that there are plenty of American workers who could fill these jobs, and that if employers were truly desperate for skills, wages for skilled positions would surge (but they haven’t). An analysis led by Hal Salzman, a professor at Rutgers University, found that the U.S. graduates more STEM workers than the tech industry needs and that STEM wages have stayed depressingly flat. They write: For every two students that U.S. colleges graduate with STEM degrees, only one is hired into a STEM job. In computer and information science and in engineering, U.S. colleges graduate 50 percent more students than are hired into those fields each year; of the computer science graduates not entering the IT workforce, 32 percent say it is because IT jobs are unavailable, and 53 percent say they found better job opportunities outside of IT occupations. A literature review by Yi Xue and Richard C. Larson of MIT found that there is and isn’t a STEM skills shortage — it depends on where you look. In the academic job market, for example, they conclude there is no noticeable shortage; in fact, there is an oversupply of PhDs competing for tenure-track faculty positions in many fields (e.g., biomedical sciences, physical sciences). But the government sector and private industry have shortages in specific areas. In the private sector, for instance, software developers, petroleum engineers, and data scientists were found to be in high demand. There is other evidence of a strong demand for workers with tech skills. The Economist has reported that the number of unfilled U.S. jobs in computing and information technology could top one million by 2020: “The number of young Americans graduating with qualifications in IT subjects is rising, but nowhere near fast enough to satisfy the burgeoning demand for their skills. Last year, American campuses produced fewer than 56,000 graduates with the sort of qualifications sought by information technology (IT) firms.” When it comes to how much immigrant and native-born U.S. tech workers earn, research by Gordon Hanson of UC San Diego and Matthew Slaughter of Dartmouth’s Tuck School of Business has found that while immigrants usually earn less than native-born workers across most occupations (controlling for factors like age, education, and gender), this difference tends to be smaller in STEM fields. They also found that wages for immigrants in STEM have actually increased: In 1990 native-born STEM workers earned more than immigrants; by 2012, this reversed. “The workers coming in on H-1Bs are a diverse crowd,” Hanson says. “You have superstar computer scientists at Facebook and Amazon and folks doing back-office IT work. But, on average, the earnings of those [foreign] workers, after just a little time in U.S., exceed [Americans’] in comparable jobs.” Hanson cautions, however, that their results do not discount the possibility that the arrival of foreign-born engineers is driving down earnings for U.S.-born engineers. “Standard economic models would say that’s happening,” he says. “But more engineers is a good thing. There may be some lower earnings opportunities for U.S.-born engineers, but there’s more innovation for the country as a whole.” Similarly, an analysis of 2010 H-1B petitions by Jonathan Rothwell and Neil Ruiz, both formerly of Brookings, found that H-1B workers earned more on average ($76,356) than American workers with a bachelor’s degree ($67,301), within the same age group and occupation. (It’s worth noting that the process of petitioning for an H-1B visa costs companies thousands of dollars, which suggests that they pay a premium for foreign workers’ skills.) Hanson and Slaughter’s paper also noted that although H-1B visas disproportionately go to STEM workers, this is not an inherent feature of the H-1B program. “That most H-1B visas are captured by STEM workers may simply be the consequences of strong relative labor demand for STEM labor by U.S. companies,” they write. Contrarily, Hira, who has been outspoken about abuses of the H-1B visa system, rebuffs the skills shortage theory. “If there was this terrible shortage, I’d think you’d see different behavior and practices,” he says. “If there was really a skills shortage, you’d see more diversity in the tech industry — they’d hire underrepresented minorities and women, they’d be training people and investing, they’d be retaining incumbent workers, not laying them off by the thousands, and you wouldn’t see rampant age discrimination.” According to Hira, the skills shortage argument is a red herring that has clouded the conversation about how H-1Bs are used. “The top occupation of H-1B workers is computer systems analyst. These are back-end IT workers. I don’t see how anybody could argue there’s a shortage of those folks,” he says. “Hiring an H-1B should, but doesn’t, require an employer to demonstrate any shortage, so the shortage argument is moot. If there is a severe shortage, then it would be easy for employers to show one. Yet they’ve opposed any such requirement.” How Much of the Debate Is About Outsourcing? One of the most consequential criticisms of the H-1B program is its heavy use by IT outsourcing firms such as Infosys, Tata Consultancy Services, and Wipro. Outsourcing has been a trend in information management for years, as companies have increasingly hired contractors (at lower cost) to do tasks such as software programming and data entry, processing, and storage. Here’s a simplified way to explain how this plays out: Say you’re a big company with your own IT department. To reduce overhead, or to cut costs, or to increase efficiency, you decide to contract out (outsource) some or all of your IT work. So you hire an IT services firm to do that work on a temporary, as-needed basis. That firm sends workers, many of whom are on H-1B visas, to do those tasks. Sometimes, these contract workers supplement your IT staff; other times, you lay off your IT staff and the contractors effectively replace them. Because these IT firms receive so many H-1B visas, there are fewer for other companies. “No matter what your view on outsourcing is, this was not the original intent of the program,” says William Kerr, an economist at Harvard Business School who has studied the effects of high-skilled immigration in the U.S. “One of the implications of this is it reduces the number of visas available for their original purposes.” “The outsourcing companies bring lower-level workers than the American tech companies,” Kerr says. “That work has $60,000 salaries, which is not minimum wage by any means, but it’s lower paid than a typical computer scientist at a large U.S. tech employer.” IT companies in India and the U.S. have lobbied against making the H-1B program more restrictive, arguing that they help American companies become more competitive by handling their IT operations. They’ve also said that the visa programs allow them to keep jobs in the U.S., so reducing the number of visas they’re allowed may result in them shifting work back to India. (However, Bloomberg recently reported that Infosys plans to create thousands of new jobs for Americans over the next two years.) What Could Change? Any big changes to the H-1B program would have to be passed by Congress. At least four proposals to reform it have recently surfaced, and USCIS has suspended expedited processing of H-1B applications. Wider reforms would change the way many companies, especially tech and IT firms, recruit and hire highly skilled talent. Further restricting the number of visas could cost the U.S. a competitive edge in the global war for tech talent. “This might sound self-serving, coming from someone who works in academia, but one thing that has helped maintain our technological leadership is innovation and technical research, and immigration has helped us do that,” Hanson says. “Immigration is an important part of why the U.S. is able to maintain its elite status.” Trump’s “Buy American and Hire American” order aims to address some of the concerns surrounding the H-1B visa system. The larger effects on high-skilled immigration — and on the economy — remain to be seen.
Cognizant Technology Solutions Corp. (CTSH) is set to report first-quarter 2017 results on May 5.
Eat your heart out, Stanford UNIVERSITY campuses can take a while to get going in the mornings, as students recover from extra-curricular antics. Contrast that with Ameerpet, a squeezed neighbourhood of Hyderabad that has become India’s unofficial cramming-college capital. By 7.30am the place is already buzzing as 500-odd training institutes cater to over 100,000 students looking to improve their IT skills. If there are ivory towers here, they are obscured by a forest of fluorescent billboards promising skills ranging from debugging Oracle servers to expertise in Java coding to handling Microsoft’s cloud. Expertise in the IT industry erodes fast as software programs are upgraded or become obsolete. Indian outsourcing giants such as Infosys and Wipro spend heavily to keep employees’ skills up to date. But staff looking to change their career paths—to say nothing of those who didn’t crack the interview in the first place—need rapid systems upgrades of their own. Training courses authorised by software providers exist but cost up to 375,000 rupees ($5,765). Fees at Ameerpet’s informal institutes are typically below 25,000 rupees for classes lasting...
Despite the high octane political drama surrounding the visa program, Infosys' shares have appreciated a strong 6.1% in the past three months, better than the Zacks categorized IT Services industry's average return of 4.5%.
У президента Трампа плохой старт с технологической индустрией. Его временный запрет на въезд граждан семи в основном мусульманских стран вызвал осуждение почти всех главных игроков Кремниевой долины, что почти сразу сделало реальными имевшиеся у этих фирм опасения в отношении него во время его предвыборной кампании.
Cognizant Technology Solutions Corp.'s (CTSH) fourth-quarter 2016 adjusted earnings of 76 cents per share fell short of the Zacks Consensus Estimate of 77 cents.
Cognizant Technology Solutions Corp. (CTSH) is set to report fourth-quarter 2016 results on Feb 8.
IS TRUMP GOING AFTER H1B VISAS NEXT? Trump’s Next Immigration Move to Hit Closer to Home for Tech. “If implemented, the reforms could shift the way American companies like Microsoft Corp., Amazon.com Inc. and Apple Inc. recruit talent and force wholesale changes at Indian companies such as Infosys Ltd. and Wipro Ltd. Businesses would have […]