After the Miracle
For a generation, Americans have been outsourcing work to India, where companies like Infosys grew bigger than Facebook and Google combined and created a new middle class. It seemed as though the boom would last forever.
On March 15, a new ad campaign appeared on the trains and platforms of San Francisco’s BART system. “U.S. TECH WORKERS!” the ads exhorted in stark block letters beneath an image of a laptop screen displaying a raised fist. “Your companies think you are EXPENSIVE, UNDESERVING & EXPENDABLE. Congress, fix H-1B law so companies must Seek & Hire U.S. Workers!” There were 350 posters in all, bought for $80,000 by an organization called Progressives for Immigration Reform. Some commuters complained that the ads were hostile to immigrants. A BART spokesperson said the ads “contradict our values,” but that it had no choice but to run them.HT: Longreads
The actual target of the ads went unnamed but was easy to discern: Indian information technology outsourcing companies. Each year, the U.S. government makes available 85,000 H-1B visas, which grant renewable three-year entry for skilled workers, and Indian tech companies have typically been awarded more than two-thirds of them. It’s a small fraction of the 4 million Indians who work in the IT services industry — but a crucial one. And one company, often applying for twice as many visas as its closest competitor, dominates the H-1B process: a Bangalore-based firm called Infosys.
Founded in 1981, Infosys has a deep, although usually imperceptible, presence in America. Sixty percent of Infosys’s $10 billion in annual revenue comes from the United States. Infosys operates an IT center for Harley-Davidson in Milwaukee. It built an employee-communication system for Kellogg’s in Battle Creek, Michigan, and the Obamacare exchange for the District of Columbia. For the Minnesota-based school-picture company Lifetouch, which photographs more than half of all American students, Infosys designed and runs a system for scheduling senior portraits. The names of many other Infosys clients are held in confidence — because the company handles so much proprietary information and because clients don’t always want to reveal how much they benefit from Indian labor. Although Bank of America and Apple are not named as clients in Infosys’s annual report, they are reportedly the company’s two largest contracts. Suffice it to say that if you have money in a major bank, or use an iPhone, or buy things online, you’ve almost certainly used software that Infosys designs or maintains.
In the company’s early years, Infosys engineers worked as mostly invisible digital construction workers and custodians, writing and testing software code for corporations that didn’t want to do it themselves. Today, its 200,000 employees do almost anything that falls under the ever-expanding umbrella of technology services, but it specializes in bespoke software, customized or built from scratch for the particular demands of specific clients, which is why it needs so many H-1B visas. If, for instance, Infosys is designing software to help a clothing retailer manage its inventory (which it has done for companies from Reebok to Nordstrom), part of the tech team needs to embed itself with the retailer to study its operations and discover precisely what software it requires.
More than any other company, Infosys is responsible for lending India its current stereotype as a nation of computer whizzes. It helped transform, for better or worse, the leafy, laid-back city of Bangalore into a gridlocked megalopolis. The company’s founder, Narayana Murthy, and his wife, the author and philanthropist Sudha Murty, are India’s Bill and Melinda Gates. “Infosys created the Indian middle class,” Kris Lakshmikanth, the founder of a Bangalore-based executive search firm, told me. The IT industry it shaped now accounts for 9.3 percent of India’s GDP.
But in the past year, Infosys and its competitors entered an unprecedented era of anxiety. “The market is in flux — there’s a lot of noise and confusion,” said Phil Fersht, the founder of HfS Research, the leading analysis firm of the IT services industry. “The level of offshoring of IT services has taken a massive dip since Trump got in.”
Among workers, a panic over possible mass layoffs swept through Indian IT in response to American protectionism, the increasing adoption of powerful new technologies designed to replace humans, and incessant rumors in the press. Complaining of “widespread abuse,” Trump has made it much harder to obtain H-1B visas. With bewildering speed, technologies such as artificial intelligence, cloud computing, and new forms of automation are transforming almost everything the Indian IT services industry does. The consulting firm McKinsey estimates that new tech could make two-thirds of the Indian IT workforce “irrelevant” by 2020. Indian newspaper headlines warned of an IT jobs “bloodbath,” and while it didn’t quite arrive in 2017, there’s a sense that the inevitable layoff crisis has simply been postponed. Though Infosys ended the year with a slight increase in employees, four other leading Indian tech firms reduced their net head counts for the first time in their histories. “For the Indian IT sector, you gotta remember, the thing’s been growing for, like, the last 20 years,” said Ray Wang, founder of the IT analysis firm Constellation Research. “So anything short of growth looks like a layoff.”...MUCH MORE