Outsourcing stir subsiding: Infosys

BANGALORE: The controversy in the United States over job losses from offshore outsourcing is showing signs of easing, the chief executive officer of Infosys Technologies Ltd said on Saturday.

"Outsourcing is an issue of concern to us. But if you look at the last three or four months, the sense we get is that the offshore outsourcing debate is abating," Nandan Nilekani told reporters.

Bangalore-based Infosys is India's second largest software exporter by revenue.

Companies like Infosys, which bank on India's low-cost, highly-skilled army of software engineers, became worried after a row erupted in this year's U.S. presidential election campaign over job losses caused by outsourcing, amid state-level legislative efforts to curb outsourcing of government jobs.

However, U.S. Labor Department statistics revealed that only nine percent of non-seasonal layoffs were caused by outsourcing, of which offshore outsourcing was less than a third, suggesting that concerns over cheap foreign labour may have been exaggerated.

"Apart from the facts of the Labor Department, in the last three months, the U.S. created about 900,000 jobs," Nilekani said.

"Part of the problem earlier was about the so-called jobless recovery ... And strong job growth of close to a million has also helped to reduce the debate on this," he added.

The United States is the main market for India software exporters, accounting for about 70 percent of their turnover.

Nilekani said prices were stable in the software service sector. Infosys stuck to the guidance it gave in April of 30-31 percent growth in revenue in the year to March 2005, he said.

Infosys may soon lose its status as India's largest listed software service exporter after the number one player by revenue, privately-held Tata Consultancy Services (TCS), filed papers earlier this week in a plan to go public.

Asked if the arrival of TCS could hurt Infosys by diverting some of the investor capital related to the technology sector away from his company, Nilekani said he would only welcome the planned listing.

"I think TCS going public is a great event. It adds to the global pool of Indian companies that are becoming global multinationals," he said.

© Reuters