Bengaluru/Mumbai: With US President Donald Trump signing an executive order that restricts federal agencies from hiring foreign workers, mostly on H-1B visas, it could be the end of the American dream for many Indian information technology professionals.
Trump’s executive order follows the federally-owned Tennessee Valley Authority’s announcement that it will outsource 20% of its technology jobs to companies based in foreign countries. This could cause more than 200 highly-skilled American tech workers in Tennessee to lose their jobs to low-wage, foreign workers hired on temporary work visas.
“We believe jobs must be offered to American workers first," Trump said.
While the immediate impact on Indian IT services companies like Tata Consultancy Services, Infosys Ltd and Wipro Ltd will be minimal as they have already stepped up visa-independent local hiring in the U.S, the move has been termed by most IT companies as regressive and based on misinformation.
IT industry’s apex body Nasscom said the order is based on “misperceptions and misinformation". The order comes at a time when workers on short-term non-immigrant visas like H-1B and L-1 are helping in bridging the acute shortage of science, technology, engineering, and maths or STEM skills in the US, it added.
“As the world opens up post the covid-19 induced lockdowns, it is important for the U.S. to be able to access talent critical to the recovery phase. Measures that restrict access to talent will slow-down the recovery phase of U.S. economy, jobs, innovation and R&D," Nasscom said.
The H1-B visa ban has put a question mark on many Indian IT professionals who were hoping to work in the US. Typically, engineers in IT services companies aspire to work out of the US in client locations at least for a couple of years as on-site employees are paid much higher wages than their offshore counterparts.
Jessy Varghese, a Kochi-based IT professional, was hoping to join his wife, who holds an H-1B visa and is on site in Florida, later this year through his own client project.
"Neither of us are placed in projects (through respective Indian IT employers) that cater to any direct government clients but my insurance industry client addresses multiple US government customers. The pandemic has already impacted work due to our inability to travel and now my onsite role in the project is potentially at risk because my US-based clients cater to federal government projects," Varghese said.
“It is absolutely unfair if I risk losing this opportunity after dedicating years of work to the client. These projects require tremendous domain knowledge and research irrespective of third party customers which we do not deal with," Varghese added.
A Bengaluru-based software professional with a large IT services company, who was hoping to relocate to the US this year along with her family, said “I worked for 10 years in this company and finally, this year, chances were high that I would be deployed on an onsite project in US. But given the new regulations on H1-B, this surely will not happen now."
“While Trump can take a call on the federal agencies, he can’t really decide on behalf of the private companies who would still want to outsource to countries like India. Also, it is impossible to locally develop the high-end skillsets overnight," said Sanchit Vir Gogia, CEO and chief analyst, Greyhound Research.
Among Indian IT firms, currently, 60% of Infosys’ US employees are visa independent.
“In the last 24 months, we have implemented our localisation initiative at scale in the US, recruiting more than 10,000 US nationals or permanent residents and significantly reduced our dependence on visa," U.B. Pravin Rao, chief operating officer, Infosys said.
Even at Wipro, nearly 70% of the workforce in the US has been locally hired.
“The intention is and continues to be a lot more contextually relevant to our customers. So we do not anticipate any disruptions in business due to the recent changes in visa norms," Bhanumurthy B.M., president & chief operating officer, Wipro said.
Companies like TCS, Infosys, Wipro, HCL Technologies, Capgemini, and Accenture among many others who employ H-1B workers also work as third-party technology solution vendors to federal government projects.
In the past five years, their government engagements have increased further as these IT companies have also established programs to extend STEM education in US. States like Texas, California, New Jersey, North Carolina, Georgia have the top concentration of H-1B visa holders in the US.
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