Is Infosys a Win for RI or Will RI Taxpayers Be Subsidizing Foreign Visa Workers

Tuesday, November 28, 2017
GoLocalProv Business Team

RI Commerce is refusing to disclose any details of Governor Gina Raimondo’s latest deal other than to say, “When Infosys applies for tax credits, we are estimating the total amount to be in the neighborhood of $10 million.”

The Indian-based consulting and technology company has promised to create 500 jobs to Rhode Island, but questions about the jobs -- and future of the company -- surround the deal. Can the company move existing jobs and realize taxpayer subsidies? And, will foreign workers be eligible for the incentive program? Infosys and Raimondo say in the jobs will be American, but RI Commerce refuses to answer these questions.

In the past, Citizens Bank has tapped Infosys for substantial tech support. In 2015, Citizens laid off more than 350 workers in RI and outsourced the jobs to IBM. "The total layoff estimate by employees ranges from 250 to 350," reported Computerworld at the time, who interviewed four Citizen IT employees: "Two were interviewed by phone, and two by email and only on condition of anonymity."

Latest Headlines for Infosys

For the past four years, Infosys has been hit with a number of controversies.

Reuters reported in 2013 that Infosys agreed to pay $34 million to end a U.S. investigation related to flying workers to client sites in the United States on temporary visas, the issue of worker visas -- H-1B visas in particular -- has continued to persist.

In April 2017, the Times of India pointed out that Infosys continued to come under United States scrutiny for visa issues:

The US has complained that Indian blue-chip IT firms Tata Consultancy Services, Infosys and Cognizant unfairly get the lion's share of H-1B visas by putting extra tickets into the lottery system, which the Trump administration wants to replace with a 'merit-based' immigration policy.

Infosys Press conference
A Trump administration official said at a White House briefing last week that a small number of giant outsourcing firms flood the system with applications, which increases their chances of success in the lottery draw. "You may know their names well, but like the top recipients of the H-1B visa are companies like Tata, Infosys, Cognizant—they will apply for a very large number of visas, more than they get, by putting extra tickets in the lottery raffle, if you will, and then they'll get the lion's share of visas," the senior official said, according to a transcript of the briefing posted on the White House website.

In August of 2017, the controversial company was hit with a leadership change and financial upheaval. CIO magazine reported, "Of late, Infosys has been rocked by controversies. The company has its founders and the current management at odds with each other. Here's a quick glance at the major recent outbursts...For the past one year, Infosys has been the center of various controversies. Be it Vishal Sikka, the recently resigned CEO and MD’s salary, or the public tiff between the founders and the current management of the company."

India Abroad reported that the battle was personal and ugly, “Sikka explained his decision in an Aug. 17 post on his blog: ‘It is clear to me that despite our successes over the last three years and the powerful seeds of innovation that we have sown, I cannot carry out my job as CEO and continue to create value, while also constantly defending against unrelenting, baseless/malicious and increasingly personal attacks.’”

Now, reports that the Trump Administration is looking to crack down on skilled foreign workers puts foreign companies -- and workers -- in the hot seat. 

"The Trump administration is increasing federal scrutiny of the employment-visa application process, a move that will make it even more difficult for companies to hire foreign workers," wrote Inc. Magazine on November 20.  "While President Donald Trump campaigned on promises to reduce illegal immigration, these measures are affecting the legal ways people come to the country. For example, the administration is targeting the high-skilled visa program known as H-1B, sending back more than one in four applications between January and August, according to The Wall Street Journal. Under Obama, fewer than one in five were sent back, according to data from U.S. Citizenship and Immigration Services (USCIS), which manages the H-1B program."

Supporters Say Its Positive for Rhode Island

Raimondo was bullish on the Infosys announcement Monday, "We are excited to welcome Infosys to Rhode Island," said Raimondo. "Because of our investments in higher education and job training at CCRI and other institutions across the state, Rhode Islanders are well-equipped and well-prepared to compete for these good-paying jobs. Infosys joins a growing local market of innovative, advanced industry companies that have chosen to plant a flag in Rhode Island."

Also supporting the move were both Gary Sasse and Saul Kaplan during their appearances on Business Monday on GoLocal LIVE.

Sasse, who is a tough critic of RI Commerce, said Infosys is the type of companies RI should try to attract. Similarly, Kaplan, who is the founder and Chief Catalyst of Business Innovation Factory gave credit to Raimondo and said Rhode Island should celebrate the news for “at least one day.”

Former GOP State Rep. Joe Trillo
Critics of the Infosys Deal

Others in the state were less positive about the news.

Likely GOP gubernatorial candidate and former State Representative Joe Trillo took aim at Raimondo's strategy. 

"Governor Raimondo is touting her success by announcing that Infosys is promising to create 500 jobs in Rhode Island by 2022.  This comes after three months of embarrassing job losses which are reflective of the state’s general business climate which is hostile to business and jobs. What the governor’s office is less interested in announcing are the millions in taxpayer-funded incentives they have to give to such companies to attract any jobs," said Trillo.

“Unlike what is happening on the national level under President Trump and his efforts to cut business-killing regulations and taxes to create jobs, Rhode Island chooses “business as usual” through special deals and corporate welfare programs at the taxpayer’s expense. Why not improve the overall business climate in order to allow real job growth?”

Mike Stenhouse of the RI Center for Freedom and Prosperity also blasted the deal, “The Infosys deal does nothing to improve our state's dismal business climate and will help very few Rhode Islanders.”

Stenhouse added,”Interestingly, while statewide legislative leaders continue to hamper small business growth, it may be the federal government that will take concrete steps to actually improve the climate for all small and large businesses."

  • Project Name: A.T. Cross

    Rhode Island Company

    Estimated Qualified Jobs Incentive Tax Credits: $1,232,499      

    Qualified Jobs: 35

  • Project Name: Ivory Ella

    Moved from CT to RI

    Estimated Qualified Jobs Incentive Tax Credits: $362,055       

    Qualified Jobs: 30

  • Project Name: Trade Area Systems

    Moved from MA to RI

    Estimated Qualified Jobs Incentive Tax Credits: $521,507       

    Qualified Jobs: 28

  • Project Name: Greystone 

    Rhode Island Company

    Estimated Qualified Jobs Incentive Tax Credits: $459,718       

    Qualified Jobs: 25

  • Project Name: Ocean State Job Lot

    Rhode Island Company

    Estimated Qualified Jobs Incentive Tax Credits: $3,230,190

    Qualified Jobs: 125

  • Project Name: Finlay

    United Kingdom Company

    Estimated Qualified Jobs Incentive Tax Credits: $1,354,105

    Qualified Jobs: 73

  • Project Name: GE Digital

    Massachusetts Company

    Estimated Qualified Jobs Incentive Tax Credits: $4,591,700

    Qualified Jobs: 85 (100)*

    *to date GE has only committed to 85 jobs

  • Project Name: Lexington Lighting

    MA moved to RI

    Estimated Qualified Jobs Incentive Tax Credits: $219,225

    Qualified Jobs: 24

  • Project Name: Granite Telecommunications

    Massachusetts Company

    Estimated Qualified Jobs Incentive Tax Credits: $779,464

    Qualified Jobs: 50

  • Project Name: Virgin Pulse

    United Kingdom Company

    Estimated Qualified Jobs Incentive Tax Credits: $2,501,073

    Qualified Jobs: 292

  • Project Name: Surplus Solutions

    RI Company

    Estimated Qualified Jobs Incentive Tax Credits: $454,681

    Qualified Jobs: 16


  • Project Name: Johnson & Johnson

    New Jersey Company

    Estimated Qualified Jobs Incentive Tax Credits: $4,425,860

    Qualified Jobs: 75


  • Project Name: Whiting & Davis

    RI Company

    Estimated Qualified Jobs Incentive Tax Credits: $255,221

    Qualified Jobs: 15

  • Project Name: UNFI

    RI Company

    Estimated Qualified Jobs Incentive Tax Credits: $1,873,805

    Qualified Jobs: 150

  • Project Name: Agoda

    Connecticut Company

    Estimated Qualified Jobs Incentive Tax Credits: $3,039,394

    Qualified Jobs: 200

  • Project Name: eMoney

    Pennsylvania Company

    Estimated Qualified Jobs Incentive Tax Credits: $3,162,196

    Qualified Jobs: 100

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