Indian Outsourcing Companies Losing Appetite for H-1B Visas

Ann All

As I wrote back in April, applications for H-1B visas got off to a slow start. The U.S. Citizenship and Immigration Services got about 13,500 applications in the first two weeks it accepted them, a big drop from the 42,000 H-1B requests filed during the same period in 2009.

 

The USCIS has received an additional 5,000 or so applications since then. That's far off the pace of 2007, when the number of applications exceeded the 65,000 annual limit on the first day the USCIS began taking them, and 2008, when the USCIS got 163,000 H-1B applications in five days.

 

The Economic Times credits the H-1B slowdown to a number of factors, notably the Employ American Workers Act, a piece of legislation enacted in February that imposes hiring restrictions on recipients of funding through the Troubled Asset Relief Program (TARP). I'm sure the legislation has something to do with it, but I don't think it plays that big a role, considering it applies to a fairly small number of companies. (Those that have repaid TARP funds no longer have to comply, for example.)

 

The article points out that Indian outsourcing providers are taking advantage of the still-slow job market and hiring more American workers to work in the U.S. Tata Consultancy Services increased the U.S. workforce at its Cincinnati application development center from 75 to 300. (When TCS opened the center in 2008, press reports indicated the center would employ up to 1,000 people. The economic slump may have slowed TCS' plans and/or it employs far more Indian nationals than U.S. citizens in Ohio.)

 

Wipro plans to increase American employment to 40 percent of its U.S. workforce. (The article doesn't indicate the current breakdown.) It quotes Chairman Azim Premji as calling this increase "good insurance against any more restrictive visa policies." It "also positions [Wipro] well for certain state government business."


 

According to the article, Indian companies received 4,762 H-1B visas last year, down from 20,530 in 2006. Only four Indian companies were among the top 10 H-1B applicants, down from eight in 2006. It predicts up to 20,000 H-1B holders may return to India within the year. Though salaries are lower in India, job growth is more likely there with Indian companies spending more on IT than their Western counterparts.

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Jun 15, 2010 1:10 AM P Henry P Henry  says:

If these Indian outsourcing companies are able to hire American workers all of a sudden, doesn't that prove that the cheap labor advocates were lying all along when they said (and say to this day) that there is a shortage of qualified American workers?

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Jun 15, 2010 1:22 AM yoyome yoyome  says: in response to P Henry

What a joke ?? Only 300 or 1000 !! what a big joke ? The reason they hire US citizen because some of the job duties require to have citizenship. Don't be  fool. US companies hire H-1B in millions and millions, the Indian only hire few hundred American citizen and you start saying not cheap labor. So stupid and naive..

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Jun 15, 2010 1:46 AM P Henry P Henry  says: in response to yoyome

I have absolutely no idea what you just said.  I'm going to take a wild guess and assume that you are here on an H-1B visa?

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Jun 16, 2010 8:49 AM BB BB  says:

Some claim that the H-1B program helps to create American jobs, but it is currently being used by some companies to outsource American jobs to foreign countries.  Under current law, an outsourcing company can use American workers to train H-1B guest-workers, fire the American workers and outsource the H-1B workers to a foreign country where they will do the same job for a much lower wage.  In fact, Indian Commerce Minister Kamal Nath has referred to the H-1B as "the outsourcing visa."

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Jun 16, 2010 8:53 AM human human  says:

lol @ P Henry and yoyome

well...with the current state of the economy and the government increasing its regulation and oversight of the H-1B program, yes they sure going to lose their appetite for H-1Bs. Whether it's good or not is debatable. One thing I believe is good is that many 'body shops' would go out of business and companies would have to pay decent wages to get those jobs done. It's also good for young hard working foreign professionals with hopes and dreams who often get lured in by those body shops and live a miserable life in the end. Such abuses will decrease drastically with tighter control.

Will it bring more jobs back to the US? or will it cause more companies to move overseas in the longer term? The answer is not simple. It's a global economy. Looking globally, the US had a huge pool of tech workers and engineers, but now many developing nations also have such highly educated people. So the education/skill scale is not tipped towards the US anymore, and on the top of it comes the cost advantage developing nations have.

In the longer term the greatest danger to the US will be innovations and scientific breakthroughs coming out from other countries. The US can maintain its success if it can retain enough skilled people in its workforce.

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Jun 22, 2010 6:59 AM Beta Us Beta Us  says: in response to P Henry

Most people complaining about the H-1B visas are descendants of folks who came to this country years back looking for a job from some other country in the world. Many did not even need a visa to be able to work in the US, possibly because of the special relationship or favoritism with the country of origin or having chosen to find asylum from some enemy nation. Indian IT H1-B visas are only a fraction of the 65,000 visas that are offered to folks from all over the world. So may be getting educated first on the facts would help. Then may be we could debate one day about the usefulness of a competitive labor market, and the dangers of protectionism.

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Jun 24, 2010 3:00 AM Learnenglish Learnenglish  says: in response to yoyome

Great, go have a cookie!!!!

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Jun 24, 2010 12:45 PM yoyome yoyome  says: in response to Beta Us

"Then may be we could debate one day about the usefulness of a competitive labor market, and the dangers of protectionism"

--> Most of the people that I know angry about H-1B visas are not protectionism. They just want to have a fair competition in both wage and brain. Most of companies in the US does not follow the rules, they just go out declaring not enough talent to hire more cheap H-1B workers and layoff the locals despite the guidelines. As the result so many layoff and unemployment because of these types of unfair competitions. If you are living in US and your career is related to IT got push by some H-1B visas and how do you feel ? We just want fair competition that is all about. We are willing to compete anybody in the world if giving fair chance.

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Sep 8, 2010 4:18 AM Pitt Pitt  says:

In addition to the H1-B visas scam, another unfair trend that is happening in the IT industry, is the number of Indian IT placement agencies that have mushroomed in in the last couple of years. These companies exist mainly to obtain jobs for their fellow country whose H1-B visas is about to expire.

As a someone in the IT industry who has experience this first hand, those Indians hired here by American companies who are in middle management or a position to hire, are deliberately discriminating against U.S citizens. They are give the job to their fellow Indians over the American worker. It is conceivable the the Human Resources in these U.S companies are not catching on, but sooner than later, someone is going to ask the question "why is there such a disproportionate number of Indian nationals reporting to Indian managers?".

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Sep 21, 2010 9:43 AM OutofworkNOW OutofworkNOW  says: in response to Pitt

The reason there are fewer H1Bs is that Indian companies are using the L1 and L2 and other visas that let them bring inter-company employees here when they have established a US presence of their company...this is cheaper for them since they can pay local (Indian) rates and still farm out these people to US companies! Where there is a will to GREED there is a way. I know this first hand from a company based in the UK who are bringing in CANADIAN and UK IT workers under similar arrangements...

and they even qualify under certain labor rules because of NAFTA (for the Canadians at least!).

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Sep 22, 2010 10:02 AM James Rennie James Rennie  says: in response to Pitt

I could not agree with you more on this statement

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Oct 7, 2010 9:19 AM user_tom user_tom  says: in response to James Rennie

well its all about insecurity. in modern world of open economy all companies will try to get the work done where they will get it done cheaper and with quality. Tommorrow even if i will do business, i will do the same thing.

Second thing H1B issue:

To get the talent from outside the world, h1b program has to be retained. US economy is strong because of Innovation. If innovation is out then its gonna be bad for Economy.

And if companies did not get talent here..they gonna offshore jobs which is even more dangerous....because some of the other related jobs will also move..and govt will stop getting the taxes which it is getting from H1bs and also the contribution of these h1bs towards economy (they buy cars, houses and other stuff etc.)

Third thing: America is all about immigrants right from History. Except few americans all migrated from the other countries. Either they migrated or their parents or their grandparents.

Fourth: Someone commented about "if given a chance"... Chance is a thing which you have to grab..nobody will give you a chance in a plate..

World is so competitive now...if we won't prepare against these people..we gonna loose competitiveness....

And till now all the american companies had headquarters in US because of open economy... once it will start putting protectionist measures..companies gonna move to places where there will be less restrictive policies....some articles indicated that some companies have moved to Canada and Ireland..

In the end i will say that some of ur concerns are valid...and those have to be addressed....but just blaming the whole system won't work....

Negatives always comes in with positives...all we have to do is close these gaps and keep up the good points....

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Oct 22, 2010 9:33 AM jay krish jay krish  says:

Let me give you my take on Americans from my experience.This is coming from a foriegner (Indian Origin) and is very objective.

Americans, in general, are Self-reliant, generous and Broad Minded.On the down-side They are lazy minded,

More Pleasure seeking and spoiled,a bit thick in the heads, Less concentration and thus lacking subtle acumen in general.Now don't confuse a guy's physical prowess to mean that he is hardworking.To put efforts through the mind and painstakingly learn abstract complex technologies in a short amount of time which is constantly changing and running with updating yourself with ever new technologies etc..You think that comes easy.It will split your balls in two even before it spilts your over strained and sensitive soft minds..You may have steel muscles but Indian have an IRON MIND.You guys just like it too easy coz you are used to that easy life and now you are mad because you have to compete with cut throat competetion from the real hardworkers from the world..But the Patient Indian puts up through all that stuff.Hardworking Indian.Never complaining Indian.Determined Indian.And faithful Indian.And lastly HUMBLE INDIAN.Trust me there are so many people lynching off of a h1b guy..It's like when a lion makes a kill.And there arrive vultures, foxes,hyenas etc.. to munch off it.When I first came here in my first project I worked through 5 layers of companies above me.client pays Vendor pays Company A pays B pays C pays D pays my employer who pays me.I didn't get my first check for 6 months.Can you deal with that kind of stress ??I was alone and client was rubbing my ass to the wall with all sorts of demands. I had no weekend / no play and no game.All the time I was stressing, studying, learning.This H1B employee is the most exploited lot by everyone.Even fellow indian companies.all american vendors were also making sshhit loads of money.My pay from client was almost 100 bucks /hr.you know how much I take home after taxes.hardly 30 bucks/hr.For all my pains of living alone in the cold without no family.CaN YOU DEAL WITH THAT ?.....

Please don't be confused with all development you see in the US to mean that the people there are very hardworking or creative.If you analyze you will see that all menial hard-work like construction, laying roads,plumbing have been traditionally done by mexicans and in the old days all the rail-roads were done by chinese and native indians , all the farmlands and agricultural drudgery in the south have been done by blacks etc..Right upto this point on the hardworking and nation building aspect your traditional white americans can claim only a very neglible share.

On the intelligence front, They do have skills but apparently not enough which can be seen by the technology domination that's being done by the asians.And that's not just indians on H1B - (Ofcourse they have a vise-grip on IT sector there)-but Japanese (Can you match the Japanese car making technology and their creativity -Not a chance in hell-says not me but your own market), Chinese (with all their electronic gadgets,cell phones the size of peas, Computer components,Pheripherals, virtually every electronic gadget including that garage remote you hold in your hand come from those Hardworking and enterprising china-man.), Koreans, Russians ( Most of your space technology is stolen from russians) and some smart europeans(All these Scientists that you claim over the centuries as american starting from the recent great Albert Einstien are Europeans. Reply

Oct 22, 2010 9:33 AM jay krish jay krish  says:
Your national culture hasn't produced a single genius only accorded them amnesties or bought them off from foreign countries) But of course all this degradation is only of recent times.But, in the past, there used to be truly original people like George Washington and Benjamin Franklin.

But don't think I am trying to portray most Americans as inferior to everyone else although one may be tempted to acknowledge that in glare of the above facts.But I am not gonna commit that mistake.I know they are not less than anyone else but superior they most definetely are not.I am just bringing all this up to give you a perspective and get you to look at the reality and cool (humble) you down a bit and not fly off your handle.

think about this.

when you have a cow-standard then a chunk of gold in your hand will not help you to eat.It's only when you move out of the stone age and the yardstick is changed to gold-standard that you know it's value as we see it today.

Similarly when physical might was the order of the day, The animal killing savage hordes of the west became superior and they wrote the history of the world to their liking up-until that day.But as the wheel of time spins around and we get into an age when technological strength and superior mental acumen and mental stamina is the order of the day.Even a child can see that reversal of roles.It's the law of nature and it's bound to happen.If the wheel is spinning then the spoke that was once on top has to come down and the one that was down has to go up weather they like it or not.

Can you alone stop that ?Can you stop the rotation of the earth, my friend ?

May you always keep an open mind and always seek complete knowledge is the humble prayer of,

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Jul 26, 2011 1:46 AM spdb spdb  says: in response to jay krish

There is no 1% doubt that Indian outsourcing companies are fishing in the troubled waters of market in America. These companies are unprofessional, they sent indian workers to work on visit visa to USA, which is illegal. They sent false documents to US embassies to get L1 visas approved saying these guys are expert in something and we can't get such peopel in USA. Truth is that there are enough skilled americans living here who is denied an oppurtunities. When it comes to business, there is no integrity for these companies. Some of the big names are Wipro, Infosys and TCS.

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