Infosys founder Narayana Murthy sees layoffs in the US tech sector as an opportunity for India.
“I look at these things [such as tech layoffs] as part of a business cycle. The curve goes up and down, up and down. So I won’t be that worried,” Murthy told The CNBC Conversation.
While domestic IT companies in India worry that a slowdown in the US economy could lead to US firm spending on technology and projects in India being cut, Murthy said Indian IT firms will benefit instead.
“Whenever there’s a downturn in the U.S. or in the developed world, there’s a bigger opportunity for countries like India, especially in my sector, that offer better value for money,” Murthy told CNBC’s Tanveer Gill.
“In a downturn, the market shrinks a bit and our charter is very clear. We work even harder and then take a bit more market share and you won’t have a job loss problem,” Murthy said.
Sometimes described as the father of India’s IT sector, Murthy – with his six friends – founded Infosys in 1981. He was CEO from 1981 to 2002.
Funded with an initial investment of $250 from Murthy’s wife, Infosys has grown into a multi-billion dollar company valued at over $60 billion.
India’s second largest IT company employs more than 346,000 workers worldwide from Asia Pacific to North America to Europe and the Middle East.
Many companies are choosing to outsource software development to India for quality at lower costs, said Krina Mehta, co-founder of US-based offshore software development company Fortune Infosys, in a LinkedIn post.
“Working with [Indian developers]you will have access to high-quality IT professionals at a fairly reasonable price compared to the prices you would have to pay in the West,” Mehta said.
Mehta said India has a talent pool full of skilled software developers who have developed a wide range of technical specializations from relevant and core technologies such as Python programming to newer enterprise technologies such as .NET Core.
According to custom software development company Peerbits, companies can save 20% to 30% on technology costs by outsourcing their custom software development needs to India.
“The lesson for American corporations is to ensure that they improve their productivity, reduce their costs automatically, even without depending on countries like India, China, etc. I think this is the way to move forward,” Murthy said.
Opportunities are coming
Murthy said many American companies like General Electric and Microsoft have established research and development centers in India.
“Other American and European companies are coming. So I guess our opportunity will come in the coming years,” Murthy said.
“The Indian leadership under Prime Minister Shri Narendra Modi has introduced many initiatives like ‘Startup India’ to ensure that the country becomes a hotbed of innovation,” Murthy said.