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MNCs like IBM, Accenture score low in creating local jobs in US

Though MNC players have larger presence in US compared to Indian players, their overall headcount has been coming down

Shivani Shinde Nadhe Pune
The US immigration bill that has the potential to change the Indian IT services business model, is favouring multi-national players like IBM and Accenture, said analyst. This despite the fact that several MNCs have reduced their headcount in the US, this when the Indian IT players have been doing the opposite.

According to a JP Morgan India report, though MNC players like IBM and Accenture have a larger presence in the US compared to Indian players, their overall headcount has been coming down.

For instance, IBM’s US headcount in 2012 is estimated at 91,000, down sharply from around 127,000 in 2006. In other words, IBM’s US headcount has declined by 36,000, almost a third of that in 2006. IBM’s annual reports disclose that over CY06-09, IBM’s headcount in the US has declined by 22,000 (17%) to 105,000 in CY09 from 127,000 in CY06 (from CY10 onwards, IBM stopped disclosing US headcount data in its annual report).
 

This decline is seen despite IBM’s ongoing acquisitions in the US over this period," said Viju George and Amit Sharma of J P Morgan in their report.

However, IBM's headcount in India has significantly ramped up over this time-frame. "News reports (Dataquest) indicate that IBM, with 135,000+ employees in India (possibly even exceeding 150,000), has more employees in India than any other company (except TCS)," said the report.

Accenture, though has not shed any jobs in the US, it seems to have added very marginally to its headcount in the region. Accenture’s current US employee headcount is around 40,000 (including H1B/L1 visa holders) with about twice the staff in India (75,000+) as in the US.

"Again, as with IBM, Accenture’s India staff has nearly tripled in the past 6-7 years while its headcount for US citizens has probably

only marginally increased (or even stayed flat) despite US-based acquisitions. Its US employee base is now less than 15% of its total employee base," said the report.

On the other hand Indian IT players like TCS and Infosys have been increasing their headcount in the US. India's largest IT services provider, TCS has been hiring atleast 500 people on quarterly basis.

"Last year we hired about 1,800 people in the US. We have been one of the largest recruiters in the country," said N Chandrasekaran, CEO & MD, TCS.

According to data from Nasscom, Indian IT services over 2006-11, has helped add 107,000 jobs in the US (of which about 30% is the proportion of US citizens).

"Both IBM and Accenture are now among the top-10 H1B visa applicants from India. In contrast, the offshore IT Services industry which has some track record of job creation in the US for US citizens seems to be singled out for not creating enough jobs for US citizens in the US," said the report.

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First Published: Jul 24 2013 | 6:15 PM IST

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