Infosys Is Becoming a Model of Non-transparency

Don Tennant

For a company that has long boasted that it sets an example for the rest of us about transparency, Infosys Technologies sure appears to be anything but transparent. And I'm clearly not the only one who's starting to notice.

 

"In terms of transparency and corporate governance, I don't want to say we are the best in the world but we are certainly one of the best," Infosys Co-founder and Chairman Narayana Murthy told Forbes.com in 2002. Among his company's guiding precepts, Murthy added: "The softest pillow is a clear conscience," and "When in doubt, disclose."

 

Hold that thought, and consider that earlier this month, Patrick Thibodeau of Computerworld reported that a survey by the Confederation of Indian Industry (CII) found that only 10 percent of the U.S.-based employees of Indian IT service providers are U.S. citizens. Here's an excerpt from the Computerworld story:

The IT and [Business Process Outsourcing] industries "seem to exhibit less dependence on the U.S. workforce," the CII report said. "This may be explained by a skills shortage in the U.S., [and by] the availability of a highly qualified Indian workforce that dominates the IT and BPO sector not only [in] the U.S. but also globally."

Last October, Thibodeau reported that Infosys had planned to hire 1,000 U.S. workers in the United States, where the company receives about two-thirds of its global revenue. The report added:

The company has somewhere in the range of 14,000 to 15,000 workers in the U.S., but it does not break out the number of workers in this total by either citizens and permanent residents or those on a temporary work visa. Infosys is one of the largest users of H-1B visas.

It struck me as odd that Infosys wouldn't say what percentage of its U.S.-based workers are U.S. citizens, so I contacted the company to pursue the matter. I had been told by an Infosys spokesperson last month that the company has roughly 12,000 employees in the United States (I don't know what accounts for the discrepancy between that number and the numbers Thibodeau reported in October), so I emailed him on Monday morning. I asked him what percentage of those employees are U.S. citizens, and whether the company is making any attempt to increase that percentage. After having that and repeated follow-up requests ignored for a couple of days, I finally reached a different Infosys spokesperson on her cell phone. She told me that Infosys declined to disclose the information I had asked for.

 

One can only surmise, then, that Infosys doesn't want us to know what percentage of its workers in the United States are U.S. citizens. Assuming the number is somewhere in the ballpark of the 10 percent figure that the CII survey found for Indian IT service providers in general, we're left to ask why the percentage is so low, especially given the fact that around two-thirds of Infosys' revenue comes from the United States. Is it because the needed skills are lacking in the U.S. work force, as CII suggested?


 

I'm not so sure. In fact, I can't help but wonder whether the real reason has to do more with the concern that U.S. citizens are less inclined to go along with the company's shenanigans, like the visa and tax fraud that Infosys employee and whistleblower Jay Palmer is alleging in his lawsuit against the company.

 

In any case, the transparency issue is likely to get a lot more scrutiny in the months ahead. Perhaps we'll get some sense of how many Infosys employees share the views of one worker, who in his review of the company included in his list of negatives, "no transparency from senior managers."

 

Perhaps more of those senior managers, moreover, will open up and begin to speak out about the company's lack of transparency, the way former Chief of Human Resources and board member Mohandas Pai did earlier this week. Pai, who abruptly resigned from Infosys last week, raised the transparency issue in the context of the company's plans to appoint a new CEO.

My request to the board has been that when you choose a CEO, you have a very transparent process, and choose the best person for the job. In corporate India, the whole idea of CEO succession requires more transparency. I think it's very important for the boards in [India] to be more transparent when they look at changing CEOs.

Those remarks created a firestorm in India, compelling Pai to back away from them, as India's Economic Times reported:

Mohandas Pai, the outgoing Infosys director who lit a fire by criticising the selection of CEOs at the company a few days ago, tried to douse the flames on Tuesday by claiming that his comments were "general".

 

"I was asked what process would I like and I replied. I have not said anything about lack of transparency in the CEO process here. I support the process fully and believe it is transparent. I said that for me, and it is a personal opinion, experience is one of the criteria and the ability to perform in the future would be the major determinant," he told ET in an email exchange.

Make of all that what you will. For me, it's a disturbing link in a chain of concerns about whether Infosys is really as transparent as it claims to be. If the softest pillow is a clear conscience, I have to think that there are a lot of people at Infosys who will be trying to sleep on awfully hard pillows tonight.



Add Comment      Leave a comment on this blog post
Apr 21, 2011 2:37 AM hoapres hoapres  says:

This is old news.  What needs to be reported in detail is that the US IT industry is going to be offshored.

The H1Bs are "insourcing" visas.  The mostly Indian H1Bs come over to the US to learn the requisite skills and laying off the Americans.

Even more depressing is that in many cases the American taxpayer paid for the H1B fellowship, TA or RA so they got their graduate degree along with the requisite skills.

To those perhaps Don saying that never happens.  That is exactly what happened in 2002 at the BofA in Concord, CA with the condition that the soon to be unemployed Americans as a condition of receiving their severance would have to train their Indian replacements taking the jobs to India.

American (most likely in many cases) soon to be unemployed IT people should be thinking along the lines :

"Americans and Indians working proudly together to improve corporate profits by exporting jobs."

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Apr 21, 2011 2:56 AM Dolores Dolores  says: in response to hoapres

Not just Infosys. Didn't Tata promise to hire locals in Buffalo and elsewhere? Did they ever? Bets, anyone?

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Apr 21, 2011 7:45 AM R. Lawson R. Lawson  says:

When it comes to guest workers, I don't want to rely on corporate disclosure because it is clear that corporations won't provide that information without serious nudging - and even that may not work.

I believe that the government must track current numbers, by company, and make that data available in real time to the public.  The only way this will be possible is if we track entry and exits of these workers.  I don't want to go through FOIA requests or wait for some curious journalist to beat it out of them.  I certainly don't want to sue over information that I believe should be available to the public.  Unfortunately, their may be no other choice.

This information is especially important prior to any legislation or reforms dealing with guest worker visa reforms.

I believe that what is occurring at Infosys amounts to discrimination based on national origin.  It's only a matter of time before a lawfirm sees an opportunity to strike and file a class action lawsuit.  If their ratio in the US is 10 to 1 like I suspect it is, they are in serious trouble.

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Apr 22, 2011 4:04 AM J Smith J Smith  says:

Even if Infosys does hire in the US instead of bringing staff from India, they mostly hire Indians anyway.  Discrimination at Infosys is not just on nationality, it is on race, religion and age as well.  See http://articles.economictimes.indiatimes.com/2011-03-30/news/29361731_1_age-discrimination-infosys-indian-techies .  In six years working as a non-Indian at Infosys, I never met a Sikh or Muslim manager.  The company has a target of 15% non Indian staff, however it seems they plan to meet it by hiring 20,000 Chinese for their offices in China.  And anyway 15% is less than the quota for lower caste Dalit untouchables, so effectively the company is treating non-Indians worse than untouchables.  Indians will never truly succeed at the global level until they can grow beyond these prejudices.

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Apr 25, 2011 9:33 AM Paul Edgar Paul Edgar  says: in response to J Smith

Infosys practices racism and regionalism to the extreme , they have a subtle and untold rule of values where it prefers only people from a particualr state and caste to grow to managers while people from other regions are not allowed to cross the glass ceiling .The only reason people from outsiders ethnicity can attribute to this kind of opaque and agressive behaviour is they have lots of things to hide right from their visa practices to billing practices , client handling practices to balance sheet practices to their general way of conduct in day to day affairs with employees and clients . So they trust only people belonging to their own religion who wouldnt been surprised to see this ghetto behavior going on by the so called great company .Also Infosys openly bad mouths Indian government and Indian media in internal townhalls and mailers sent to the freshers joining just out of college to instill a sense of hatred and prejudice against the people from other Indian origin .There is so much bias and bitterness against people from different region that almost everyone not belonging to states of infosys directors leaves the company after 3 or 4 years of joining this so perceived great organisation who says one thing on papers and practices something completely opposite .

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May 3, 2011 10:08 AM Marshall Marshall  says:

pls check the anual reports. the geographic distribution of headcount is mentioned. if you want data, please ask for it. it will be provided.

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May 3, 2011 10:46 AM Don Tennant Don Tennant  says: in response to Marshall

I did check the annual reports. Information about citizenship of employees in the United States was not provided. I did ask Infosys for the data. They declined to give it to me. If you can tell me how many of Infosys' employees in the United States are U.S. citizens, I'm all ears.

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May 6, 2011 6:10 AM Grace Grace  says: in response to Don Tennant

It's quite likely that most US employers, not just Infosys, would not know how many of their employees are US citizens.  Unless the job requires US citizenship (i.e., due to security issues, need for a clearance for working with restricted data), companies cannot inquire about an individual employee's citizenship, nationality, or national origin.  Citizenship generally cannot be a condition of employment, and most employers take pains not to ask about this.  Employers may be presented documentation of citizenship at time of hire (when the employee presents documents to authorize employment), but the employer is not obligated to track the citizenship status of its employees. 

From a legal perspective, a US citizen, a green card holder, a refugee, and an asylee (person granted asylum) are all equally considered "US workers" in the eyes of the law.  If an employer was tracking which of their employees were (or would not) US citizens, they could be inviting an investigation by the DOJ's Office of Special Counsel, which looks into discrimination based on citizenship and/or nationality.

I'm not addressing whether Infosys's US hiring practices are okay or not, only that I don't think it's reasonable to expect them to know how many of their employees are US citizens.

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