Sea change for the H1-B visa program?

by admin on February 10, 2017 in Employment, Services & Outsourcing


Hushed amid the outcry of the recent travel ban initiated by the Trump Administration, another change in how skilled foreign workers reach the United States to fill high tech jobs is under review – and if the furor of the travel ban is qualified as an outcry, the response to the proposed changes to the H1-B visa could be best described as a panic attack.

Initiating a stock dive in Indian Tech shares after the introduction of 3 bills in congress to change the H1-B visa program, as well as a draft executive order to change multiple visas including the H1-B, Indian Tech is already feeling the repercussions. Shares in major outsourcing firms including Tata Consultancy Services (TCS) plunged more than 5% on Mumbai’s stock exchange, while other top firms like Infosys (INFY) and Wipro (WIT) fell by more than 4%. These firms typically supply companies like IBM, Microsoft and Citibank with tech services supplied through outsourced labor heavily dependent on the H1-B visa.

Worth about $65 billion to India’s overall tech industry, the outsourcing firms employ millions of people collectively – it’s well understood that a major setback to the Indian economy lay ahead.

“[It] is a fact that these categories of workers are in short supply in the U.S.,” said R Chandrashekhar, president of Nasscom, which represents India’s software industry.

Silicon Valley lawmaker Zoe Lofgren introduced a bill which calls for replacing the lottery system with a preference for companies that can pay the highest salaries making it far costlier for Indian firms to send their worker to the United States.

“Cost was the major advantage for Indian companies, and that will get impacted,” said D.D. Mishra, a research director at technology consultancy Gartner. He estimates that up to 30% of software employees are working on projects for Indian firms overseas. Mishra goes on to say “There is very little room to maneuver…without disrupting the quality of work,” he said.

Although the Indian government has made their feelings on the matter known to the United States, there is little indication at this moment that anything will change the course of the proposed bills or pending executive order.