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Rediff.com  » Business » Infy now plans to spread its wings in Europe, Australia

Infy now plans to spread its wings in Europe, Australia

September 18, 2018 16:53 IST

Even though North America still accounts for 60 per cent of Infosys’s revenue, the company is starting to see good growth in Europe, which contributes around 25 per cent to the company’s top line.

Even Australia also has emerged to be a strategically important market, with a contribution of 10 per cent to the overall revenues.

After the US, Infosys is planning to take its digital hub models to Europe and Australia as the Bengaluru-based company looks at expanding its onshore capabilities in order to serve these markets effectively.

 

The company plans to begin by setting up one digital hub in the UK for which it has shortlisted four locations while it is also evaluating setting up such centres in two more European countries.

In Australia, Infosys is looking at setting up two hubs initially before expanding further.

“We are building our onshore capabilities, and to that effect, the digital centers that we have built in the US and those we are starting in Europe and Australia, are actually allowing us to recruit college graduates in those markets,” said Salil Parekh, chief executive officer and managing director of Infosys.

“In Europe and Australia, we are evaluating a few cities, though none of those have been announced. The intent is to launch digital hubs outside the US within the next six months,” he said.

In March, Infosys launched its first technology and innovation hub at Indianapolis, in the US, which was followed by another centre in Raleigh last month.

The Indianapolis hub will help the firm work with clients in machine learning, artificial intelligence, user experience, and advanced digital technologies, including big data and cloud.

Infosys is also using it as its global training centre to train, upskill and reskill its own employees as well as those from clients in digital technologies.

The company is planning to open two more hubs in the US, including one in Hartford, Connecticut where it aims to hire 1,000 US workers by 2022.

The Hartford hub will have a special focus on insurance, health care, and manufacturing serving.

According to Parekh, the concerns by certain quarters that increased hiring by the company in onshore locations, including the US, would affect the profitability negatively while adding this will, however, led the company towards a higher margin trajectory as it will help in expanding the digital business that currently stands at 28 per cent of its overall revenues.

“Actually, overall it’s not margin dilutive for us but what it’s doing is it is building a resilient business model for the future,” said Parekh.

“In fact, in one of our internal sessions, there was a view that as we are building a full pyramid in these locations, it will actually have positive impact on our margins,” he said.

Even though North America still accounts for 60 per cent of Infosys’s revenue, the company is starting to see good growth in Europe, which contributes around 25 per cent to the company’s top line.

Even Australia also has emerged to be a strategically important market, with a contribution of 10 per cent to the overall revenues.

Immigration constraints in the US over the past few years have not only forced Indian IT giants to actively hire overseas but also to explore markets outside the US in order to offset risks.

The likes of TCS have around 30,000 employees while Wipro reported over 55 per cent local workforce in the geography, including heavy grants and partnerships with local universities for campus hiring.

Parekh said the company had launched an aggressive recruitment drive in the US, especially through campus recruitment.

In the past one year, Infosys has hired 1,500 freshers from across 40 campuses.

It had earlier set up a goal to hire 10,000 local Americans for its US centres in the next couple of years.

The company has so far hired over 4,700 people.

“My sense is that we’ll exceed that target and we will go much beyond this. Because today the view is, we will have a significant number will come in the next 12 months,” Parekh added.

Outside of the US, the company has started doing campus hiring in the UK and Australia, though the numbers are far lesser as compared to India and the US.

In the past 12 months, the company hired 80 and 25 campus recruits from the UK and Australia, respectively.

Infosys is also actively reskilling and "refactoring" their employees into newer more relevant technologies even as they continue focus on campus recruitment through 6-10 weeks long programmes.

Photograph: PTI Photo

Bibhu Ranjan Mishra & Romita Majumdar in Bengaluru/Mumbai
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