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Will H-1B Visa Holders Feel the Pain of Impending Cisco Layoffs?

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As Cisco Systems gears up for what may be the biggest round of layoffs in its history, it will be interesting to see how Cisco, one of the biggest sponsors of H-1B visas in the country, makes the decisions of who stays and who goes. It would be extremely unfortunate if it's found to have released American citizens ahead of H-1B workers strictly in the interest of cost savings.

 

Cisco won't say how many jobs it plans to eliminate, but according to a May 13 Reuters report, analysts predict the number could go as high as 4,000:

Four analysts contacted by Reuters estimated the world's largest maker of network equipment will eliminate up to 4,000 jobs in coming months, with the average forecast at 3,000. That would represent 4 percent of Cisco's 73,000 permanent workers. It also has an undisclosed number of temporary contractors. Cisco cannot point to bad market conditions or a weak economy as excuses for wielding the ax to its payroll. Instead, [Cisco CEO John] Chambers [in April] took responsibility for mistakes in managing Cisco, saying it needs to focus on its core businesses and be more disciplined about expanding into new areas. Cisco said on [May 11] that it planned to trim its workforce as part of a plan to cut some $1 billion in costs from its annual budget. Executives declined to comment on how many jobs they will cut, saying they will make an announcement by the end of summer.

According to the website myvisajobs.com, Cisco sponsored 5,220 H-1B visa workers during the period 2001 to 2010. Cisco declined to say how many H-1B workers it currently employs, but since the visa is good for three years, it seems logical that the number would be at least equal to the number of H-1B visa petitions it made in the last three years. The numbers for 2008, 2009 and 2010 are 543, 394 and 166, respectively, for a total of 1,103.

 

In an email exchange I had with Dr. Gene Nelson, an immigration reform advocate in Arlington, Va., he noted that "in the detailed 2011 statistics (FY 2010) there are a significant number of managers. It would be likely that some of those managers are managing groups of H-1Bs hired from 3rd party body shops such as Tata, etc."

 

In any case, it's probably safe to conclude that Cisco currently employs over 1,000 H-1B visa holders in the United States. In an email exchange with Kim Berry, president of the Programmers Guild, he pointed out that Cisco would have to pay the travel expenses of any H-1B workers it terminates prior to the end of their authorized employment period. That raises the specter of Cisco avoiding those terminations in order to dodge the expense of sending workers back to their home countries.

 

Now, many people would argue that Cisco should get rid of all of its H-1B workers before it lays off a single American. I am not one of those people. It's just not that simple. As the Reuters article pointed out, the restructuring that will result in the layoffs is all about exiting non-core businesses:

[S]ome of the layoffs are expected to come from businesses that Cisco pulls out of in coming months. Chambers, who has led Cisco for 16 of its 26-year history, has said he will pull out of some nonstrategic areas where Cisco is not the No. 1 or No. 2 player. [In April] Chambers said Cisco would dump its Flip video camera business, ax 550 jobs and take a charge of $300 million related to the move. He has yet to disclose which business will be next to go, but Cisco has invested heavily in a wide range of consumer products that have yet to take off, including its Umi home video conference system and home security cameras.

We don't know what percentage of Cisco's H-1B visa holders work in the non-core businesses that are going to be axed, but whatever the percentage is, it will have some impact on who gets cut. In other words, if there are few or no H-1B visa holders working in the businesses that Cisco is shuttering, terminating all of the H-1Bs before any American is laid off simply isn't feasible. On the other hand, if there are H-1B visa holders working in the doomed business units, and Cisco were to lay off Americans working in the core businesses and replace them with those H-1Bs in order to avoid having to shell out the money to send the H-1Bs home, we should all have a huge problem with that.

 

But there will be instances in which an H-1B visa holder has a particular skill set, experience level and performance record that demand his continued employment. He should not be terminated before a lesser qualified American just by virtue of his nationality and visa status. Cisco just needs to do the right thing and ensure that its U.S workers get the consideration and fair treatment they deserve.

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