India gains from ADP US headcount freeze

PUNE: Automatic Data Processing Inc. (ADP), a US-based IT R&D and ITES company, would contain its future investments in US and the same would be channelised in other international centres.

"We have been growing at 12 to 13 per cent and expect to grow at 15 to 20 per cent here in a couple of years. A good portion of the non-US growth would come to India," hinted president and CEO, Gary C Butler today.

The company currently has 45,000 associates of which 30,000 are in the US while the rest are spread over other global centres. The India headcount, which presently stands at around 2000, would be ramped up too.

The company today inaugurated a centre in Pune, which will be beefed up to 1000 associates in two years. ADP has also added another facility in Hyderabad.

"The Pune centre would handle both R&D and BPO work besides serving as a continuity and disaster recovery centre for Hyderabad," said Shakti Sagar, managing director, ADP India.

Incidentally, Butler also pointed out that India would have an edge over China in outsourcing work given its language and arbitrage advantages.

"The attractiveness of China in outsourcing dilutes as one moves away from big cities like Shangai. However, we are doing product development work in China."

Since 1999, India has witnessed around $100 million worth of investments with a significant share of $700 million R&D work for ADP on areas like new development, convergence and maintenance coming to Indian shores.

The $9 billion company, as announced in September, would be spinning off its brokerage division effective April 2,2007 on a reverse spilt, tax-free spin basis, thus turning to around $7.7 billion.

"We have got all the necessary SEC approvals.

This division does not have the same potential as the other ones and it would now be in the best interests of shareholders with a separate equity arm," said Butler.

The other two ADP divisions of employer and dealer services are expected to generate double digit growth and the spun unit is expected to churn single digit growth after the spin-off.

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