TCS opens new US centre in Ohio; to employ 1,000 locals

18 March 2008

Who says India's IT companies take away US jobs? In this existing climate of a global economic downturn and fears of an impending American recession, comes the news of an Indian company making moves to hire close to 1,000 people in the country.

Tata Consultancy Services, India's top software exporter, may have laid-off several hundred employees in India the recent past, but that hasn't stopped its expansion plans in foreign markets.

According to a regulaory filing, TCS has opened its largest centre in North America in the state of Ohio in the US. This facility, spread over a huge 220 acres, has been developed at a cost of $20 million and is expected to accommodate 1,000 employees, most of whom ''most of whom will be locally hired from the region and its universities''. This facility has been christened TCS Seven Hills Park and is located in Milford, a suburb of Cincinnati. Ohio Governor Ted Strickland was among those who attended the inauguration yesterday.

The local government has extended favourable tax breaks to entice TCS to locate its new centre in the state. The company received a 90 per cent property tax break worth $15 million over eight years to locate in Ohio. The average salary of the employees working there is expected to be in the region of $60,000.

Tata already employs close to 14,000 people in the U.S., including staff traveling there on on-site assignment. It has operations in Arizona and New Jersey, and a training center in Buffalo, New York. The region accounts for about half of the company's revenue. This move to increase its presence in the region is an attempt to move up the value chain in the range of services it offers to its clients, and to also obtain better insight into local markets.

The deteriorating situation in the US markets does have analysts worried regarding the future prospects of IT outsourcing companies like TCS, with many of them forecasting lower growth in net-profit this year as compared to last fiscal. Infosys chief financial officer V. Balakrishnan admitted as much when he said ''If there is a major slowdown in the US economy, then it could impact our growth''. Infosys is the second largest IT exporter after TCS.