By Rishika Sadam
Cognizant Technology Solutions Corp reported a higher-than-expected quarterly profit and said it would beef up hiring in the United States, a move that comes amid U.S. President Donald Trump's tough stance on the H1-B visa rules. Cognizant gets more than 75 percent of its revenue from North America and relies heavily on workers on H1-B visas to provide IT services to clients. H1-B visas are non-immigrant visas that allow U.S. companies to temporarily employ foreign workers. The majority of Teaneck, New Jersey-based Cognizant's roughly 260,000 employees are based in India.Trump has ordered a review of the U.S. visa program that brings high-skilled foreign workers into the country, potentially affecting hiring plans of technology firms and outsourcing companies.Cognizant plans to hire significantly more in the United States, expand delivery centers and reduce its dependence on H1-B visas, President Rajeev Mehta said on a call with analysts."We applied for less than half the number of visas we saw last year and we expect to further reduce our need for these visas going forward," Mehta said.
Cognizant said it hired 4,000 people in the United States last year. The company, however, down played concerns about pressure on costs and margins due to U.S. hiring."I do not anticipate any significant increase in costs as a result of training and re-training," Chief Executive Francisco D'Souza told Reuters. "I do not see training having a substantial impact on our margins going forward." Indian IT firms have also been hit hard with Trump's visa review. Infosys Ltd said earlier this month it plans to hire 10,000 U.S. workers in the next two years and open four technology centers in the United States.
Wipro Ltd is also looking to hire more people in the United States. Both companies have reduced H1-B visa applications this year.Cognizant said it expected current-quarter revenue in the range of $3.63 billion to $3.68 billion. Analysts on average had expected revenue of $3.65 billion, according to Thomson Reuters I/B/E/S.Last year, The company cut its forecast thrice amid a tight cap on spending by its clients, especially in the financial and healthcare sectors.
The company sees promising demand from the sectors in 2017, D'Souza said. Cognizant's profit rose 26.3 percent to $557 million, while revenue rose 10.7 percent to $3.55 billion.Excluding items, the company earned 84 cents per share. Analysts' were expecting 83 cents.Cognizant's shares were up 2.2 percent at $62.12. (Reporting by Rishika Sadam in Bengaluru; Editing by Anil D'Silva)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: May 05, 2017 21:48 PM