Infosys Poised to Double U.S. Staff, Expand Presence in Europe

Published reports say that Infosys, India's software giant, is poised to increase its employees in the U.S. twofold with a hiring spree of about 1,000 staff.

In addition, the outsourcer is targeting acquisitions in Germany, Japan and France, according to a report by the Wall Street Journal. The strategy for Infosys is to increase operations in Asia and Europe. Simultaneously, the industry giant expects to slash its exposure to the U.S. market in the wake of the recession.

Pricing is expected to stay the same in the near term until demand goes up, V. Balakrishnan, Infosys CFO told Reuters at the sidelines of the India Investment Summit in Bangalore. Balakrishnan said Infosys is seeking to acquire firms involved in back office, consulting, utilities and healthcare.

Religare Capital Markets analyst, Anurag Purohit commentated that Infosys cannot simply change their takeover philosophy in just a year. However, with a cash pile of nearly $3 billion, Infosys is poised to look more aggressively at acquisitions.

Balakrishnan also mentioned that although the margins are profitable now, the strong rupee could weigh on company profits. The sixty billion dollar outsourcing industry in India has been stifled by the economic turmoil with core financial customers have freezed spending on technology and negotiated stiff decreases in prices.

Infosys reels in about 66% of its net revenue from the U.S. The company is expecting an incline in outsourcing contracts with technology spending about to rise in developed countries.

Infosys CEO, S. Gopalakrishnan told reporters while speaking about acquisitions that in the usual case the Indian outsourcer is interested n acquiring a company that is approximately 10% of Infosys, reports oneindia.in. Gopalakrishnana also said that the company is seeking to target a takeover of a firm that brings in about $300 - $500 million in revenue each year.

Infosys is listed on the NASDAQ and competes with rivals Tata Consultancy Services and Wipro. Infosys has seen its pricing dwindle by as much as 5% in the first half of the year.

Karl Keirstead, an analyst at Kaufman Bros, said keeping pace of growth in revenue would be the toughest issue for Infosys. He added that the company might still be a few quarters away before a spike in demand is observed.

Nonetheless, Balakrishnan maintained that the U.S. would still lead Europe as the company's biggest market. He added that Infosys expects a minimum of 40% revenue to be generated in the U.S, 40% from the European Union and 20% from other parts of the world.