Wipro U.S. Chief Thanks Dobbs, Kerry
By TSC Staff 6-9-2005 10:57 AM EDT
In an exclusive interview with TheStreet.com's Stree****ch Webcast, Wipro (WIT:NYSE - commentary - research) executive Richard Garnick half-jokingly said CNN host Lou Dobbs and former Democratic presidential nominee John Kerry "helped our business" by raising awareness about outsourcing.
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Challenging Dobbs -- an ardent critic of outsourcing -- to a debate, Garnick, who is chief executive, Americas, argued that outsourcing helps create jobs in the U.S. by allowing American companies to reduce their IT budgets.
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"We help clients do more with less," he said, citing a 2004 study by the Information Technology buttociation of America (ITAA) that found IT outsourcing created more than 90,000 net new jobs in the U.S. as of 2003 and is expected to create 317,000 net new jobs by 2008. (Garnick is a board member of the ITAA, a trade buttociation serving the IT industry.)
Similarly, Garnick says India presents "a great market opportunity" for American multinationals and thus the potential for job growth in the U.S., citing Boeing (BA:NYSE - commentary - research) and General Electric (GE:NYSE - commentary - research) as examples of U.S.-based companies currently benefiting from India's economic growth.
Beyond the political hot-button issue of outsourcing, Garnick said the Indian software giant has discussed a secondary offering of ADRs but "hasn't come to a decision" about when, or if, it will proceed.
Speculation that Wipro will engage in such a transaction rose after fellow Indian software and computer-services company Infosys (INFY:Nasdaq - commentary - research) priced a $1 billion secondary offering of ADRs last month.
That's the talking points coming from the Indian punditocracy. There was this kind of talk going on in North America during the peak of...
Garnick said Wipro may do a similar offering but "doesn't need the cash," noting that the company is producing free cash flow in excess of $300 million per year. Furthermore, Wipro is seeing "growth across every enterprise, every vertical, every geography and every practice" in which it operates, he said, suggesting the company will continue to generate healthy cash flow.
Wipro is experiencing "strong demand" for its services, Garnick said, as companies move away from the "big bang" strategy of outsourcing everything toward "more discreet buys and specific projects." IBM (IBM:NYSE - commentary - research) and Electronic Data Systems (EDS:NYSE - commentary - research) have observed similar trends, he noted.
The entire video interview can be accessed here.
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