Donald Trump's Win May Effect Infosys Profit Margin
Wednesday, 23 November 2016, 17:26 IST
BENGALURU: Donald Trump has been elected as the next president of the United States of America by defeating Hillary Clinton. There are lots of backlashes from American citizens as many of them even protested against the President-elect. Business houses are also a bit scared of the possibilities appeared after the electoral speech by Donald Trump. The Indian IT giant Infosys is also not denying the fact of a decrease in business. NDTV Profit reported that Infosys CEO & MD, Vishal Sikka said that profit margins might be reduced because of the policies of Trump.
Vishal Sikka said that as Trump iterated anti-immigrant policies in his electoral speeches, it will reduce immigration in the states. Removing illegal immigrants from the US is one of the top priorities of Donald Trump. Sikka said that the company is preparing its US business units to deal with anti-immigrant policies of Trump. In the near-term, the profit margins might be impacted. To be precise, the company hasn’t done any simulations to understand the estimated impact.
Trump’s policies will restrict the company in sending low-cost developers with temporary visas to work in the United States. On many big tech projects going on in the United States, companies hire low-cost employees from other countries. However, under the new policies, they will have to hire local staff. According to Vishal Sikka, hiring people in the US is way more expensive, but he added that till now there is no downfall in the list of potential applicants.
Infosys doesn’t want to lose its US market as Cognizant does, because there are enough universities in the US from where candidates can be hired and conveniently trained. Last month, the second time in the time of a quarter, Infosys reduced its revenue growth targets as some major western clients are holding themselves from spending. Therefore, Indian software service exporters are feeling the heat and it is resulting in a decrease in business share and profit margins.
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