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<ul><li><keyword id="6357549" type="UNKNOWN" weightage="20" keywordseo="Indian-IT-companies">Indian IT companies</keyword> are growing faster in the US market than Europe for the first time in three years.</li><li>Pressure from deal ramp ups, increasing visa costs, rising subcontractor costs and higher salary payouts has taken a toll on margins.</li><li><keyword id="6354512" type="COMPANY" weightage="20" keywordseo="Infosys">Infosys</keyword> and TCS are the worst hit by the lack <a href="https://www.businessinsider.in/amazon-facebook-apple-google-face-low-h1b-rejection-rate-while-deloitte-capgemini-suffer/articleshow/69734189.cms">of H1-B visa applications</a>.</li></ul>Indian IT sector has a lot to fear but has more to gain as well. Unlike many companies which are in the throes of a slowdown, the IT sector has bigger fish fry. European markets which are its mainstay are growing slow, and the US is dealing with recession fears. Adding fuel to the fire, the US government is making it tough for them to operate, with tighter immigration laws which are taking its toll. Yet, IT companies are showing signs of resilience. For the first time in three years, US led growth is ahead of growth from the European Union, according to Nomura’s market analysis. Ramping up operations in the US It will neither be cheaper nor easier to play a lot more in the US markets, as their ability to send employees to service the clients will not be easy. To counter the aftermath of diminishing manpower in the US, these companies have ramped up acquisition and large deals to make up for it. Infosys and TCS are the worst hit by the lack <a href="https://www.businessinsider.in/amazon-facebook-apple-google-face-low-h1b-rejection-rate-while-deloitte-capgemini-suffer/articleshow/69734189.cms">of H1-B visa applications</a>. Yet, these companies are trying to gain more clients in the country and adding manpower. The acquisition and deals, in turn, are the primary reasons why momentum in US markets is greater than growth in European markets at a yearly growth rate of 12.4%. And they will continue to gain more deals, believes Nomura. The negatives bearing IT down Increased number of large size deals is causing companies to miss margin estimates. Additional pressure from increasing visa costs, rising subcontractor costs and higher salary payouts has also taken a toll on margins. Hiring has grown at a yearly rate of 10% and attrition levels remain elevated at 17% to 22%. Three out of the four Indian IT giants — TCS, Infosys, HCL Technologies and Wipro — missing their growth expectations and all them missed margin expectations. Though IT companies chase other markets, they are not immune to Indian slowdown blues. The stagnation in growth is attributed to slowdown in banking, financial services and insurance (BFSI) coupled with <a href="https://www.businessinsider.in/auto-sales-continue-to-decline-in-august/articleshow/70941671.cms">softness in automobile manufacturing</a>. BFSI’s soft growth and the future outlook is an indicator of the challenges that IT companies are facing in capital markets, large EU banks and regional banks in the US. Retail growth was also flat at 7% to 9%. The brighter side of IT In spite of dragging factors, the IT sector has a few fast growth segments like energy which is growing at 12.7%. Telecom is also is growing at 13.9%. The IT sector, overall, is a part of a growing disruptive transition across the country and the world — digitisation. Digital growth has also been strong for IT companies like TCS, Infosys and Wipro during the first quarter for the current financial year. They have shown quarterly growth of 42.1%, 41.9% and 34.2% respectively. Going forward, Nomura expects Indian IT companies to price their products aggressively in a bid to win more market share. The IT sector is one of the core sectors of the Indian economy. GDP growth is at 5% — a six year low for the country — and re-energising the IT sector which is a huge chunk of services sector, is a key part of the puzzle. See also: <a href="https://www.businessinsider.in/amazon-facebook-apple-google-face-low-h1b-rejection-rate-while-deloitte-capgemini-suffer/articleshow/69734189.cms" style="">H-1B visas: US immigration seems to like certain companies more than others</a> <a href="https://www.businessinsider.in/us-h-1b-visa-rejection-rate-may-trigger-tech-ma/articleshow/69721592.cms" style="">Rise in US H-1B visa rejection may force Indian tech companies to look at M&amp;A</a> <a href="https://www.businessinsider.in/here-are-the-25-most-popular-workplaces-in-india-according-to-linkedin/articleshow/68704338.cms" style="">Here are the 25 most popular workplaces in India, according to LinkedIn</a>

TCS, Wipro, and Infosys are chasing growth but losing margins in the process

<ul><li>Global IT majors will have to bear the brunt of a strong US dollar, despite expectations of revenue growth.</li><li>Back home, Indian IT giants are bearing the brunt of concerns of a potential recession in the US and Europe.</li><li>Several economists have predicted that the US, the world’s largest economy, could slip into recession in the near term.</li></ul>While <keyword id="6357549" type="General" weightage="20" keywordseo="indian-it-companies" source="Orion">Indian IT companies</keyword> are worried about a potential slowdown due to recession, their global counterparts have already started factoring in the impact on their profitability and revenues because of it. The fact that two overseas IT giants – <keyword id="6370971" type="General" weightage="20" keywordseo="accenture" source="Orion">Accenture</keyword> and <keyword id="28721" type="General" weightage="20" keywordseo="cognizant" source="Orion">Cognizant</keyword> – have lowered their growth numbers says a lot about the bleak outlook for the sector because of rising inflation and currency headwinds. Accenture cut earnings per share for 2022 to $10.61-10.70, compared with its previous estimate of $10.61-10.81. The Russia-Ukraine war also had an impact on its earnings as it decided to close down its Russian business. The company said it expects a negative foreign exchange impact of 4.5% in fiscal 2022, worse than its previous forecast of a 3% forex hit, as per a <a href="https://www.reuters.com/business/accenture-beats-quarterly-revenue-estimates-2022-06-23/">Reuters</a> report. Note that Accenture makes more than half of its revenue from outside the US. A strong US dollar means weakness in other currencies – this has an adverse impact on companies with exposure to currencies other than the dollar. Confirming the bleak environment to make money, even Cognizant lowered its revenue guidance to 9-11% in constant currency terms as compared to 8.5-11.5% earlier. “Results were strong though the focus of the Street has shifted to impact on business in a recessionary environment,” said a report by Kotak Institutional Equities. A recession in the US and Europe will impact Indian IT companies directly Stocks of Indian IT companies have seen a major correction this year, as a surging inflation and the rising interest rates reduce the spending power of their clients in the US and Europe. Post the breakout of the Covid pandemic, Indian IT giants TCS, Infosys and Wipro reported record earnings as their clients rushed to digitize their operations to meet their growing IT needs. Now, it looks like the era of record growth is over, leading to sharp corrections in stock prices. <div type="image" title="IT firms top 5 companies" height="900" width="1200" msid="92437564" hostid="261" sizebytes="55924"></div> "The stock price correction (in Indian IT firms) has largely been due to de-rating of valuation multiples, as earnings estimates have largely remained intact or seen minor downgrades. The reasons for this sharp derating, as we mentioned above, are largely related to the global macro environment,” said a report by Phillip Capital. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/may-is-the-first-month-of-2022-when-startups-raises-less-than-2-billion/articleshow/92432430.cms">May is the first month of 2022 when startups raises less than $2 billion</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/mm-shares-hit-52-week-high-on-the-back-of-rural-revival-more-good-news-in-store/articleshow/92432812.cms">M&amp;M shares hit 52-week high on the back of rural revival – more good news in store</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/auto/news/okinawa-electric-scooter-showroom-in-mangaluru-catches-fire-several-scooters-destroyed/articleshow/92433747.cms">EV fire – Okinawa electric scooter showroom in Mangaluru catches fire, several scooters destroyed</a>

Accenture, Cognizant could see revenue growth but a strong US dollar could spoil the party

Here’s how attrition and wage costs are dampening Indian IT companies’ results

<ul><li>Indian IT giants are scrutinising every aspect of their expenses in order to cut down on costs as business takes a hit during the coronavirus pandemic. </li><li>Wage hikes have been paused, new employees aren’t being onboarded, and it helps that <keyword id="123591" type="PERSON" weightage="20" keywordseo="Work-from-home">work from home</keyword> means that travel expenditure is low for the meanwhile. </li><li>The weakening rupee against the US dollar brings in support. </li><li>Cost-cutting measures may help companies tide through the turbulent time, but they won’t help overall margins expand. </li></ul>The global economic recession would mean that the companies that employ the services of Tata Consultancy Services (<keyword id="6357150" type="ORGANIZATION" weightage="20" keywordseo="tcs">TCS</keyword>), <keyword id="6354512" type="COMPANY" weightage="20" keywordseo="Infosys">Infosys</keyword>, HCL Technologies, <keyword id="10862" type="CITY" weightage="20" keywordseo="Wipro">Wipro</keyword>, <keyword id="43217" type="CITY" weightage="20" keywordseo="Tech-Mahindra">Tech Mahindra</keyword> and the likes are likely to cut corners and therefore, the Indian IT giants will also have to curb costs. All IT majors in India have listed a few ways ⁠— no salary hikes, reduced costs like travel and sponsorships, increased work from home⁠ — to cut costs. And, the Chief Financial Officers (CFOs) are hoping that a stronger dollar will boost margin when earnings are converted to rupee. However, a former Infosys Board Member TV Mohandas Pai believes that all these may, at best, keep the margin intact. “The IT industry will suffer in the near term due to bankruptcies of clients, a decline in spends, and economic contractions,” Pai told Edelweiss. “Big companies are already making 20 to 25% margins, and both rupee depreciation and productivity improvement are the tools that enable them to maintain margins,” he added. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Operating Margin Q4 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">TCS </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">25.1% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Infosys </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">21.1% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HCL Technologies </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">20.9% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Wipro </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">17.6% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tech Mahindra </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">15.5% </td></tr></tbody></table> IT majors have ‘no regret’ capping salaries for the time being Wipro is considering temporarily putting employees on leave in order to manage costs. Similarly, Infosys CFO Nilanjan Roy, said “We have stopped hiring temporarily, we have also frozen any salary hikes, we have temporarily suspended all promotions — so these, we believe, are no-regret moves,” during the fourth-quarter earnings call. So, how much does that save? According to the TCS annual report, the average annual increase was 6% in India. And, for the top five IT companies in India the employee costs can range from 30% to as much as 54%. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Actual employee cost FY20 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% of revenue </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HCL Technologies </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 9,916 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">30.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">TCS </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 64,906 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">49.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Infosys </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 42,434 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">53.7% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">TM </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 9,282.70 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">31.8% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Wipro </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 26,171.80 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">51.9% </td></tr></tbody></table> ‘Work from home’ can be a big cost saver <keyword id="141968" type="CITY" weightage="20" keywordseo="HCL-Tech">HCL Tech</keyword> has proposed a <a href="https://www.businessinsider.in/business/corporates/news/hcl-tech-follows-tcs-and-infosys-lead-says-50-of-its-employees-will-work-from-home-even-after-the-lockdown-is-lifted/articleshow/75593968.cms">50/50 plan</a> ⁠— where only 50% of its employees will need to work from office at any given time ⁠— while TCS CEO Rajesh Gopinathan wants only <a href="https://www.businessinsider.in/business/corporates/news/tcs-ceo-says-the-business-model-is-20-years-old-and-its-time-to-go-employee-lite/articleshow/75243124.cms">25% of the employees on any project at any one place, at any one time. </a> The rest can work from home even after the lockdown has ended. “This would axe travel and real estate costs by roughly 300 to 400 basis points,” according to Pai. A hundred basis points make for a percent. However, there are other <a href="https://news.stanford.edu/2020/03/30/productivity-pitfalls-working-home-age-covid-19/">experts who believe</a> that any increase in productivity seen during the pandemic may only be temporary as other social options are limited. Once the lockdown is lifted and normal activity resumes, the same level of productivity may prove difficult to sustain. A weaker rupee is good for companies that earn in dollars Infosys has already gained 2% on the rupee depreciation — which meant a 50 basis points margin benefit — in the fourth quarter with 97% of their billing in foreign currency. HCL technologies also saw a similar benefit on their margins of around 53 basis points. “Foreign exchange movements, particularly the rupee movement is the one that gave us the maximum benefit,” said CFO of HCL Technologies, Prateek Agarwal. For TCS, movements in currency exchange rates through the year resulted in a positive impact of 0.1% on the reported revenue — that’s around 10 basis points for the whole year. These cost-cutting measures are the need of the hour to maintain margins, however, they aren’t going to spurt profitability, according to Pai. IT majors will be happy keeping the profit margin where it is with FY20 being more about sustaining growth rather than boosting profits. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/indian-banks-earn-3-1-billion-with-rbi-instead-of-giving-loans-to-businesses-despite-repo-rate-cut/articleshow/76000355.cms">Indian banks have made $3.1 billion just by parking funds with the RBI — instead of giving them out as loans</a> <a href="https://www.businessinsider.in/policy/economy/news/these-indian-states-have-seen-the-worst-economic-impact-due-to-the-covid-19-pandemic/articleshow/75999085.cms">These Indian states have seen the worst economic impact due to the COVID-19 pandemic</a> <a href="https://www.businessinsider.in/business/corporates/news/airtel-share-price-target-as-africa-unit-nears-a-billion-dollars-in-revenue/articleshow/75970641.cms">Airtel’s Africa unit is now a nearly-billion dollar business where every user pays 40% more than the one in India</a>

Three ways TCS, Infosys and other IT giants in India are trying to cut costs — but it’s not going to increase their profitability

You don’t have to worry about the Donald Trump effect as a report suggests that the tech industry will hire 76% between December 2016 and March 2017 in India. 
 
The survey by Experis IT stated the software development is in demand and people having a mix of complex and niche skills will be preferred the most. 
 
Experis IT president Manmeet Singh told TOI, “Due to complex requirements in IT firms and startups, and emerging automation and artificial intelligence, there will be a need for constant upskilling and re-skilling among job-seekers. This would be particularly relevant as employers have reported difficulty in filling jobs because of talent shortage and gaps in skillsets.” 
 
As per the Experis IT Employment Outlook Survey, south (34%) and west (20%) will have more hiring, followed by north (18%) and east (3%). 
 
Singh said told TOI, “48% of employers surveyed in India reported difficulty in filling jobs, with IT professionals being in the top spot. So, to tide over the shortage in skilled IT talent, firms are increasingly hiring IT professionals on contract, as it's cost-effective, and improves flexibility and agility of companies.”

Shout out to IT professionals! Companies will hire 76% more during Dec-Mar

As if finding a job in India's $160-billion IT industry wasn’t hard enough, fresh engineering graduates would have to deal with another disappointment this year. If reports are to be believed, they would not get to see any hike in their starting salaries anytime in the near future. 
 
ET talked to human resources heads of top IT companies like TCS, Infosys and Wipro, as well as several IT recruiters and experts, and reported that these firms are unlikely to revise fresher-level wages amidst declining spending and struggles to protect their profit margins, and not to forget the rising inflation and cross-currency fluctuations. 
 
However, a huge demand-supply imbalance can’t be ignored when it comes to the country's largest software services firms taking the liberty of not offering any hikes to freshers, since the dearth of jobs has led to one job being available for every five fresh engineering graduate. 
 
Presently, India produces over 1 million engineering graduates every year, however, the number of jobs available in the IT industry is somewhere around 200,000-300,000, as per Nasscom data. 
 
"Ten years ago, the supply-demand situation was neck to neck -- the number of engineers graduating was roughly similar to the number of jobs in the IT industry. That has changed drastically -- as of now, supply is 5 times as much as demand. When you have five people competing for one position, you don't have any incentive to raise salaries," said Achyuta Ghosh, head of research at Nasscom. 
 
<a href="http://www.tappaproductions.com/wp-content/uploads/2016/03/empty-pockets.jpg">Image source</a>

Top IT companies won’t offer any salary hikes to fresh engineering graduates this year

Employee unions situated in the city of Chennai in the southern state of <keyword id="20154" type="ORGANIZATION" weightage="100" keywordseo="tamil-nadu">Tamil Nadu</keyword> are coaxing software professionals to join hands after rumours of IT sector considering major firings. The state has around four lakh IT professionals, and has seen, in the recent past, job losses at the middle level. This has led to Forum for IT Employees (<keyword id="4141674" type="UNKNOWN" weightage="100" keywordseo="fite">FITE</keyword>) and the IT wing of the 20-year-old New Democratic Labour Front (<keyword id="1164431" type="UNKNOWN" weightage="100" keywordseo="NDLF">NDLF</keyword>) form trade unions within glass-walled technology campuses. Unions have been emboldened by the experience they had in the manufacturing sector, where powerful unions negotiated tough wage deals. "Even now, mobilising support in a big way in IT is difficult," said Kumar S, a member of NDLF-IT. Both FITE and NDLF-IT have conducted black-gag protests, sent petitions to the state labour department, having sought the inclusion of IT firms within the purview of the Industrial Disputes Act that allows "workmen, to seek the help of the government in settling disputes with the employer. (Image source California Political Review)

Tamil Nadu is building a union for tech professionals

Top IT firms in India are facing what could be one of their worst quarterly results in the recent past. An already poor performance in usually week Q3 was further damaged by Chennai floods and a general slowdown in the money spent on technology globally. 
 Even as the Indian IT industry stands at $146-billion today, Indian tech giants like <keyword id="6357150" type="CITY" weightage="100" keywordseo="TCS">TCS</keyword> and <keyword id="6354512" type="CITY" weightage="100" keywordseo="Infosys">Infosys</keyword> can still fall short of Nasscom's 12-14% exports growth outlook for FY16. 
 
"Our modelling has factored in a certain figure for the likes of TCS (Tata Consultancy Services) - now we have to wait and see how the Q3 numbers turn out before we change our projections," an unnamed Nasscom executive told ET. 
 
Experts are of the opinion that India's top five software exporters may see a 1-2% fall in revenue, or at their level best, would be able to keep a flat performance, which means that they wouldn’t be posting any profits in Q3, which ends on December 31. TCS and <keyword id="10862" type="CITY" weightage="100" keywordseo="Wipro">Wipro</keyword>, two of India's largest software exporters, have already issued warnings for Q3, and are afraid that the dark patch may well peek into the next financial year. 
 
"This will be a pretty bad quarter for Indian IT - no two ways about it. If they even manage to post flat growth, it will be seen as a positive by investors," a foreign brokerage analyst tracking India's software outsourcing industry told ET. 2015 has proven to be one of the toughest years for IT service providers, mainly because of clients having cut back on their spending. 
 
To top it, Chennai floods forced many IT firms to shut their offices in the city for several days, adding to the damage that has been done. 
 
<a href="https://www.engageselling.com/blog/wp-content/uploads/2014/10/RefreshBlogOct7.jpg">Image source</a>

Did top Indian IT firms just face their worst ever quarter?

Amongst all <a href="http://www.businessinsider.in/Following-the-global-suit-against-TCS-Indian-IT-firms-are-making-huge-bids-for-mega-deals/articleshow/51995134.cms">Indian IT giants</a>, the fourth largest software exporter <keyword id="141968" type="CITY" weightage="100" keywordseo="HCL-Tech">HCL Tech</keyword>nologies has delivered the highest sequential growth in dollar denominated revenue for the June quarter. The announcement was made while declaring the company’s quarterly results, and HCL tech portrayed a more optimistic growth scenario for FY17. 
 
The deal that HCL tech did with Volvo's IT services division in February this year has added over $40 million to the revenue during the June quarter, which took it to $ 1,691 million, a growth of 6.5% from the previous quarter. Even if we exclude the revenue from this deal, the organic revenue growth was 4%, better than its rivals. While <a href="http://www.businessinsider.in/TCS-eyes-Brexit-impact-after-beating-profit-estimates/articleshow/53222302.cms">TCS </a>reported 3.7% revenue growth, it was 2.2% and 2.6% for <a href="http://www.businessinsider.in/Infosys-to-invest-in-an-Indian-VC-fund/articleshow/53521785.cms">Infosys </a>and <a href="http://www.businessinsider.in/Wipro-has-changed-its-traditional-metrics-will-incentivise-team-champions/articleshow/52830085.cms">Wipro</a>, respectively. 
 
Also read: <a href="http://www.businessinsider.in/Indian-IT-firms-like-Infosys-Wipro-HCL-want-to-seal-larger-deals-worth-over-500-million-only-on-one-condition/articleshow/51992889.cms">Indian IT firms like Infosys, Wipro, HCL want to seal larger deals worth over $500 million only on one condition</a> 
 In FY17, the company expects the revenue to grow by 12 to 14% (without considering the foreign exchange fluctuations). Rival firm <keyword id="6354512" type="CITY" weightage="100" keywordseo="Infosys">Infosys</keyword> has given an estimate of 10.5 to 12%. 
 
<a href="http://2.bp.blogspot.com/-F9KYRUiwFhg/VmAjRV7SwUI/AAAAAAAACsI/GcNLp4SnDGM/s1600/hcl.jpg">Image source</a>

HCL Tech registered more growth in June quarter as compared to its peers

<keyword id="6356687" type="General" weightage="80" keywordseo="canada" source="Orion">Canada</keyword> has initiated a significant move which will benefit Indian professionals and other foreigners as it expanded its work permits to family members of temporary international workers from next year. While addressing the reporters, Minister of Immigration, Refugees and Citizenship of Canada Sean Fraser announced that his department is extending work permits to family members of temporary foreign workers on Friday. Prior to this announcement, spouses were only eligible for a work permit if the principal applicant was working in a high-skill occupation. This temporary measure aims to improve the emotional well-being, physical health and financial stability of workers by keeping families together. As a result, it is expected that the worker will better integrate into their overall work environment and community, according to the press statement released by Immigration, Refugees and Citizenship Canada. Starting in January 2023, through a temporary 2-year measure, Canada will expand eligibility to work in Canada to spouses and working-age children through a phased approach for workers at all skill levels. This would include families of workers in health care, trades and hospitality, for example. As a result of this new approach, it is estimated that family members of more than 200,000 foreign workers could begin working in Canada, offering a greater opportunity for both foreign workers seeking to work in Canada and for employers addressing their labour needs. "Everywhere I go, employers across the country continue to identify a lack of workers as their biggest obstacle. Today's announcement will help employers find the workers they need to fill their labour gaps by expanding work permits to family members at all skill levels, resulting in family members of over 200,000 foreign workers being able to work in Canada. Our government is going to continue helping employers overcome labour shortages, while also supporting the well-being of workers and uniting their families," the statement quoted Canadian Minister as saying. "Labour is the number 1 challenge facing Canada's tourism sector as we position ourselves for post-pandemic growth. Today, our government is bringing in innovative, family-based solutions to resolve this issue and help our tourism partners grow to meet the global demand for Canadian experiences from coast to coast to coast," he added. SEE ALSO: <a href="https://www.businessinsider.in/science/health/news/postpartum-depression-in-mothers-can-have-serious-consequences-on-the-childs-health-and-development/articleshow/95946346.cms">Postpartum depression in mothers can have serious consequences on the child’s health and development</a> <a href="https://www.businessinsider.in/stock-market/markets/news/foreign-investors-upgrade-india-as-dedicated-allocation-in-investment-portfolios-say-equity-experts/articleshow/95974087.cms">Foreign investors upgrade India as dedicated allocation in investment portfolios, say equity experts</a>

Family members of Indian workers now eligible to work in Canada

<ul><li><keyword id="6357456" type="General" weightage="100" keywordseo="huawei" source="Orion">Huawei</keyword> has come under the scanner of Indian agencies over tax evasion.</li><li>The Income Tax department has accused Huawei of repatriating large amounts of money to its parent company in China.</li><li>The department has claimed that Huawei sent the money in the form of dividends to reduce its taxable income.</li></ul>Chinese smartphone maker Huawei is the latest company to come under the scanner of Indian agencies. The Income Tax (IT) department has accused Huawei India of repatriating large amounts of money to its parent company in China. According to an Economic Times <a href="https://economictimes.indiatimes.com/news/india/huawei-india-sent-huge-sums-to-parent-even-as-revenue-fell-says-tax-dept/articleshow/92735497.cms">report</a>, Huawei has been accused of repatriating large amounts of money in the form of dividends to reduce its taxable income in India. <cmsannotation type="cmsannotation" annotationid="Huawei sent ₹750 crore as dividends despite dwindling revenues" comment="subhead" text="Huawei sent ₹750 crore as dividends despite dwindling revenues">Huawei sent ₹750 crore as dividends despite dwindling revenues</cmsannotation> The <keyword id="59032" type="General" weightage="20" keywordseo="it-department" source="Orion">IT department</keyword> has claimed discrepancies in the income declared by Huawei in India for at least two financial years. The department has alleged that the company had remitted ₹750 crore as dividends “even when its revenue was reducing drastically”. Huawei has been under the IT department’s scanner for quite some time now. In February, the department had frozen the bank accounts of the company after it found evidence of tax evasion during a search operation. The Delhi High Court had <a href="https://economictimes.indiatimes.com/industry/telecom/huawei-india-ceo-3-executives-summoned-in-i-t-case/articleshow/92137955.cms">summoned</a> the chief executive officer and three executives of Huawei after a complaint was filed by the IT department claiming the company was withholding information. “The non-compliance by the accused company and its officers had resulted in obstruction and stifling of search action of authorized officers,” the court had said in its order. Huawei in its petition to the court had claimed that the freeze on its accounts without any notice had affected its business. In its response to Huawei’s claims, the IT department claimed that it had "incriminating material" against Huawei and added that the company’s petition is "a ploy raised on frivolous grounds just to obstruct departmental proceedings and to avoid consequential payment of taxes". <cmsannotation type="cmsannotation" annotationid="Not the first Chinese company to come under the scanner" comment="subhead" text="Not the first Chinese company to come under the scanner">Not the first <keyword id="149012" type="General" weightage="20" keywordseo="chinese-company" source="Orion">Chinese company</keyword> to come under the scanner</cmsannotation> Huawei is not the first Chinese smartphone maker to come under the scanner of Indian agencies. Earlier this year, the Enforcement Directorate (ED) had <a href="https://www.businessinsider.in/business/news/exclusive-84-of-the-5551-27-crore-seized-from-xiaomi-india-were-remitted-to-qualcomm-group/articleshow/91560593.cms">claimed</a> that Xiaomi had illegally remitted ₹5,551.27 crore. After Xiaomi, <keyword id="215177" type="General" weightage="20" keywordseo="vivo" source="Orion">Vivo</keyword> came under the scanner of ED, and earlier this month, the financial watchdog revealed that the company has transferred nearly <a href="https://www.businessinsider.in/business/news/exclusive-84-of-the-5551-27-crore-seized-from-xiaomi-india-were-remitted-to-qualcomm-group/articleshow/91560593.cms">$8 billion</a> to its parent company in China over a five year period, which amounted to around 50% of the company’s turnover during the period. The ED is investigating violations of the Prevention of Money Laundering Act (PMLA) act by the Chinese smartphone maker. SEE ALSO: <a href="https://www.businessinsider.in/tech/enterprise/news/vivo-reportedly-transferred-nearly-8-billion-to-its-parent-company-in-china/articleshow/92726095.cms">Vivo reportedly transferred nearly $8 billion to its parent company in China</a> <a href="https://www.businessinsider.in/business/news/exclusive-84-of-the-5551-27-crore-seized-from-xiaomi-india-were-remitted-to-qualcomm-group/articleshow/91560593.cms">EXCLUSIVE: 84% of the ₹5,551.27 crore of the alleged illegal remittance by Xiaomi India were to the Qualcomm Group</a> <a href="https://www.businessinsider.in/tech/enterprise/news/ed-has-reportedly-raided-44-locations-of-vivo-and-related-firms-across-the-country/articleshow/92672031.cms">After Xiaomi, Vivo comes under the Enforcement Directorate’s scanner</a>

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Did top Indian IT firms just face their worst ever quarter?

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HCL Tech registered more growth in June quarter as compared to its peers

Family members of Indian workers now eligible to work in Canada

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