TCS Unfazed by US PERM Freeze, Focuses on Local Hiring
Tata Consultancy Services (TCS) has stated that the US suspension of the PERM program will not significantly impact its workforce strategy or client work. The company revealed that its PERM filings were in single digits over the past two years, minimizing the effect of the suspension. TCS further emphasized that its PERM applications were so minimal that they do not anticipate any changes to their staffing plans or customer engagements in the US.
The US government’s decision to freeze the PERM program has raised concerns among IT service providers. However, TCS has assured that its operations will remain largely unaffected, citing its low reliance on the program. This assurance comes amidst a broader crackdown on skilled-worker immigration routes, with the suspension announced by US Vice President JD Vance and Labor Secretary Keith Sonderling, affecting multiple firms including Infosys, Wipro, HCLTech, Cognizant, and Capgemini.
Local Hiring Focus
TCS emphasized its focus on local hiring in the US, with campus recruitment as a primary pipeline. The company has established a substantial domestic workforce across 31 offices and delivery centers nationwide. This strategy aligns with its earlier commitment to hire an additional 15,000 people in the US over the next five years, further bolstering its local presence. TCS highlighted that its American operations are predominantly driven by local hiring, which has allowed it to build a robust domestic team.
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Industry Response and Expert Analysis
Nasscom, the industry body, has objected to the suspension, arguing that immigration and skilled talent mobility are separate issues. They also noted that only a limited number of employees transition from H-1B visas to permanent residency through PERM. Nasscom added that Indian technology companies, present in over 80 countries, have a proven track record of adhering to local laws and are expected to continue complying with US regulations. This stance reflects the industry’s broader concern about conflating immigration policies with talent mobility.
Market experts predict limited near-term revenue damage. Divam Sharma, CEO of Green Portfolio, described the move as a “sentiment shock” rather than an “earnings shock,” as the freeze does not affect H-1B visas used for client projects. Sharma explained that the suspension primarily impacts green card sponsorship, not the visas essential for ongoing client work, thus minimizing immediate financial repercussions.
The primary concern, according to Sharma, is talent retention and margins. Employees awaiting permanent residency may seek opportunities with companies that can still sponsor them, potentially increasing attrition and local hiring costs. This shift could accelerate the trend toward offshore delivery and local hiring, which may gradually erode margins, as noted by Shashank Udupa, founder of Vayu Capital. Udupa further explained that when permanent residency pathways are blocked, employees may feel less inclined to stay, forcing companies to choose between higher-cost local hires and offshoring more work.
