The use of H-1B visas by Indian IT companies in Barack Obama’s last year as US president has seen a sharp decline. This indicates that Donald Trump may only be accelerating an ongoing trend.
37% Drop In H-1B Visas In 2016
In the fiscal year 2016, the top seven India-based IT companies received only 9,356 new H-1B visas. According to an analysis by the National Foundation for American Policy (NFAP), this indicates a drop of 37% from FY2015. H-1B petitions were filed during the April 2016 and approved for individuals to start work on October 1, 2016, i.e. the start of 2017 fiscal year.
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IT Services Companies Are Also Choosing To Hire More Locally
A year before, the top seven India-based IT companies received 14,792. The foundation says, the decline reflects, in part, industry trends, mainly digital services such as cloud computing and artificial intelligence. This requires lesser people to service US clients. The report also said that IT services companies preferring to hire more local talent.
India Based Companies’ Filed Few H-1B Applications
The US has a cap of 65,000 for H-1B visas issued each year. In the case of the number of applications exceeding this cap, a lottery system is used to determine who gets how many. Hence the more applications filed by a company, the higher becomes the chances of getting more visas. The reason of getting fewer visas is linked to the fact that they filed fewer applications.
According to the NFAP report the global trend is for corporate clients (both US and India-based IT services companies) to demand digital engineering and more sophisticated services, including better data analysis that requires fewer workers and more advanced technology. NFAP said, referring to the Trump administration’s moves to restrict H-1Bs.
“These trends have escaped the notice of Congress and many policymakers, which have aimed for more visa restrictions at IT services companies.”
Ale-Loehr said in a statement,
“President Trump’s recent executive order calling for limits on H-1B visas looks backward, not forward. The current unemployment rate for computer-related jobs is 2.5% — lower than the overall national unemployment rate of 4.4%. We should encourage bright foreign students to stay and work in the United States after they graduate, not send them overseas to compete against us.”
H-1B Petitions Approved In 2016
According to the NFAP report, MNCs in IT services received fewer H-1Bs. Accenture witnessed a 44% decline in new H-1Bs between FY2016 and FY2015, and IBM from 1,919 fell to 1,608. The Indian IT companies still have around 50% of their employees working in the US on H-1Bs and L-1s. There are moves to sharply increase the minimum salary paid to these visa holders. If this happens, the Indian IT companies could be hit massively.
Among the top companies with new H-1B petitions approved in 2016 were Cognizant (3,949), Infosys (2,376), TCS (2,040), Accenture (1,889), IBM (1,608), Wipro (1,474), Amazon (1,416), Tech Mahindra (1,228), CapGemini (1,164), Microsoft (1,145), HCL America (1,041), Intel (1,030), Deloitte (985), Google (924), Larsen &Toubro (870), PricewaterhouseCoopers (713), Ernst & Young (649), Apple (631), Syntel (583), Facebook (472), Oracle (427), Cisco (380), Mindtree (327), Goldman Sachs (287), UST Global (283), JPMorganChase (271), IGATE (255), Stanford (221), Yahoo! (206) and KPMG (198).
Date: June 8, 2017