Cognizant Hiring 10,000 U.S. Workers Amid Outsourcing Debate

Alex Barinka, ©2013 Bloomberg News
Published 9:15 am, Monday, December 2, 2013

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Dec. 2 (Bloomberg) -- Cognizant Technology Solutions Corp., one of the largest providers of outsourcing services, plans to hire about 10,000 U.S. workers, potentially soothing concerns that the industry is harming the domestic job market.

The move, which President Gordon Coburn is scheduled to announce at a speech in Texas today, will increase the company’s 29,000-employee domestic workforce by about a third over the next three years. The new positions will be full-time jobs in science, technology, engineering and math -- or STEM -- fields.

A legislative battle over immigration reform has put a spotlight on outsourcing providers and their effect on U.S. technology jobs. Companies such as Cognizant and Infosys Ltd. often rely on work visas to bring in consultants from overseas, rather than hiring local workers to do the job.

In October, Infosys agreed to pay a record fine to the federal government after a probe into its use of visas.

For Cognizant, an improved U.S. economy is making it more feasible to hire full-time workers in the country, Coburn said in an interview. The company has raised its forecast for profit and sales twice this year.

“The stabilization of the economy in the U.S. has given our clients more comfort in innovation and investing in growing their own top line,” Coburn said. “There is clearly long-term demand for skilled technology professionals here in the U.S. We are working hard to identify the talent to meet our clients’ needs.”

STEM Effort

Cognizant also will award a three-year, $150,000 grant to Texas A&M University to support the school’s BioForce Initiative, which tries to lure students into STEM education. To help recruit in the area, the company will establish College Station, Texas -- the home of Texas A&M -- as its new U.S. operating headquarters. Cognizant, whose official headquarters will remain in Teaneck, New Jersey, expects to create about 750 new jobs in Texas.

Shares of the company had climbed 27 percent this year through yesterday, lifted by its improving forecasts. The stock was little changed today in New York, trading at $93.41 as of 11:09 a.m.

Cognizant relies on a global workforce of about 166,400 employees -- including staff in lower-cost countries such as India -- to provide outsourcing help and other services. Today’s move follows a push by President Barack Obama’s administration to promote STEM education. Obama said in October at a Brooklyn, New York, high school that other nations are pulling ahead of the U.S. in competitiveness because of a lack of STEM students.

“Cognizant is one of the largest recruiters of STEM professionals in the U.S. and we are facing a severe shortage of STEM talent,” Coburn said. “Rather than sitting on the side, Cognizant is doing something about it.”

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