There was a sharp decline in the use of H-1B visas by Indian IT companies in Barack Obama’s last year as US president, indicating that Donald Trump may only be accelerating an ongoing trend.
The top seven India-based IT companies received only 9,356 new H-1B visas in fiscal year 2016, a drop of 37% from FY2015, according to an analysis by the National Foundation for American Policy (NFAP). These are petitions filed during the April 2016 H-1B filing period and approved for individuals to start work on October 1, 2016 (the start of 2017 fiscal year).
In the year before, the top seven India-based IT companies received 14,792. The foundation said the decline reflects, in part, industry trends, particularly digital services such as cloud computing and artificial intelligence, that require fewer people to service US clients. It said IT services companies are also choosing to hire more locally.
Stephen Yale-Loehr, professor of immigration law practice at Cornell Law School, told that he agrees with the NFAP report’s conclusion that technological change is prompting many India-based companies to file fewer H-1B petitions, not jawboning by the US president or Congress. “The rise of artificial intelligence and cloud computing mean fewer people are needed to perform certain IT jobs,” said Yale-Loehr.
The US has a cap of 65,000 for H-1B visas issued in a year. If the number of applications are higher than this, which has been the case in recent years, it uses a lottery to determine who gets how many. The more the applications a company files, the higher its chances of obtaining more visas. So, if the India-based companies have received fewer visas, it is because they filed fewer applications. TCS last week said the number of its H-1B applications this year is a third of what it was in 2015.
The NFAP report notes that the global trend is for corporate clients of 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. “These trends have escaped the notice of Congress and many policymakers, which have aimed for more visa restrictions at IT services companies,” NFAP said, referring to the Trump administration’s moves to restrict H-1Bs.
Yale-Loehr echoed that sentiment, “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.”
The report noted that MNCs in IT services too received fewer H-1Bs. Accenture saw a 44% decline in new H-1Bs between FY2016 and FY2015, and IBM’s fell to 1,608, from 1,919. Indian IT companies still have more than 50% of their employees 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 badly.