Recent financial reports from a large India outsourcing company show a cloudy outlook.
Here in the US, outsourcing is considered almost a dirty word. This is especially true given the current fiscal crisis being experienced here and around the world. One of the biggest concerns people have is over the high unemployment and the length of time it takes many to get rehired, if they are able to do so. Some have been looking for over a year while others take any job they can get. More often at a lower rate of pay or part time just so they have something. With this being an election year, it places even more emphasis on the employment picture than it normally would. With all of that, people are taking a hard look at companies which outsource overseas for their services. A growing trend is to outsource your services to a foreign company which comes to the US to handle the outsourcing contract and bring people in from overseas to do the work.
In news being reported today, Indian outsourcing giant, InfoSys, is reporting that the future for outsourcing is not looking as bright as it has. The potential for a shift in outsourcing seems like a very real possibility. InfoSYS has cut its outlook previously and the future outlook still does not look as bright as it once did. For the very large outsourcing companies, 2012 is going to present a challenging year. It could well be that here in the US, we are finally beginning to see a reversal in the steady stream of companies outsourcing to companies overseas.
The bigger question is whether the outsourcing companies will recover after the election is over next year and the US economy begins to recover. An accurate answer to that would require a crystal ball, but the current trends in the US seem to indicate a population which wants companies to keep the jobs in the US. But even that is not clear cut as you might think. There is a big difference in the company keeping the jobs in the US or a company outsourcing to an overseas company which comes to the US to handle the outsourcing contract.
In another report about outsourcing, it appears that the outsourcing companies are operating on US soil, but continue to bring in workers from overseas to perform the work functions, all the while paying them from India and avoiding US taxes. That trend has been going on for years, but with the new restrictions on H-1B visas, new ways of bringing help in from overseas has emerged. A whistle blower is reporting visa fraud for InfoSys here in the US. According to the report, it seems that InfoSys moved to using B-1 visas according to whistle blower Jack Plamer.
According to him, InfoSys has been bringing workers over under the B-1 visas which are designed to let foreign workers come over for training or consulting. Mr. Palmer has indicated they brought people over as employees and paid them from India, thereby bypassing them having to pay US taxes and paying those individuals much less. Mr. Palmer has been locked out of all computer systems and interactions at InfoSys, but is still an employee sitting at home. His job prospects are not good after being identified as a whistle blower.
He is not the only one reporting these allegations. Another person at InfoSys here in the US is Marti Harrington who is reporting a similar story about the company. This has started a US investigation of the company and the B-1 utilization which these outsourcing companies are utilizing. This is early on in the investigations, but you can bet they will become part of the campaign trail discussions to protect US jobs.
There will be much more to this story in coming months. Jack Palmer has filed a civil lawsuit against InfoSys which is scheduled for trial in Alabama during the summer. If InfoSys does not want certain things appearing in the court record, they will be settling with him to protect themselves. In the mean time, this is going to be another show down on visas for foreign workers coming to the US and we can hope that there is finally meaningful reform.
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