For some time now, India has been a compelling locale for companies seeking to capitalize on its low labor costs — and that includes the Big Six outsourcing firms. Read how many outsourcing companies in India are expanding to the US and Europe.
Even as Big Six outsourcing providers like IBM and EDS increase their operational investments in India, Indian companies like Wipro and Tata Consultancy Services are expanding their operations around the globe, including the U.S. and Europe.
As I blogged back in June, a strengthening rupee makes hiring local employees to serve U.S. and European clients an increasingly attractive alternative to dispatching Indian workers there, with no hassles over obtaining visas or other work permits.
The Financial Times quotes Wipro's chairman as saying the company hopes to hire 1,000-plus people to staff its two new U.S. facilities, one in the Atlanta area and the other in Troy, Mich. Tata just opened its first U.S. center, which will employ up to 1,000 people, near Cincinnati.
Tata spent $13 million on the center, which will serve as its U.S. headquarters, reports Hindu Business Line. It received a number of incentives from the state of Ohio, including an eight-year, job-creation tax credit worth some $15 million and a $2.5 million grant slated to help pay for a planned $7 million renovation of the 196,000-square-foot building.
According to the Financial Times article, sites located near universities or those with large concentrations of former U.S. military personnel are of special interest to Indian companies looking to establish U.S. operations.
Wipro is also scouting locations for its second software development center in the UK, reports silicon.com. The company plans to hire an additional 200 employees at its existing UK facility in Reading, bringing that workforce to 500, before opening the second center.
Wipro currently employs some 6,500 workers in Europe. While just 28 percent of those workers are native Europeans, Wipro hopes to increase that number to at least 50 percent, says its chairman, Azim Premji.
We are dead serious about this. We want to build a local cadre. We generate a much stronger image for bidding for local contracts, which is also important.
Adding local employees is part of a bid to win higher-value consulting contracts. Though such contracts now account for less than 5 percent of Wipro's revenues, the company hopes that number will grow to at least 12.5 percent within five years.
According to the Financial Times, Wipro also wants to acquire a company in Germany and will spend up to $250 million to do so. I blogged back in August about Indian companies’ desire to buy European service providers.
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