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Offshore firms took 50 percent of H-1B visas in 2013

Patrick Thibodeau, Sharon Machlis | April 2, 2014
Data from the U.S. Citizenship and Immigration Services shows clearly that the largest users of H-1B visas are offshore outsourcing firms.

The U.S. today began accepting H-1B visa applications for the next fiscal year, with heavy demand expected. The visas will likely all be claimed by end of this week, and a major share of the H-1B visas will go to firms that use visa holders to displace U.S. workers.

U.S. Citizenship and Immigration Services (USCIS) data, provided to Computerworld, is very clear about who are the largest users of H-1B visas: Offshore outsourcing firms.

The U.S. makes 65,000 H-1B visas available each fiscal year under its base cap, with an additional 20,000 set aside for advanced degree graduates of U.S. universities. On April 1 each year, it accepts visa petitions for the fiscal year that begins Oct. 1.

The IT services firms among the top 20 H-1B users accounted for a little more than 50% of the annual base visa cap of 65,000. This is for initial visas approved in the 2013 fiscal year, not renewals. This percentage excludes some other top 20 H-1B users, such as IBM, Microsoft, Amazon, Intel, Google and Oracle. 

The two largest H-1B users are Indian-based, Infosys, with 6,298 visas, and Tata Consultancy Services (TCS), with 6,258. In third place is Cognizant, which is based in New Jersey, but runs large offshore centers. These firms have long dominated the top H-1B list spots.

These numbers represent only the visas approved last year. The H-1B is a six-year visa, and IT services firms have consistently been the largest visa users year after year. (Note: The list also includes H-1B users exempt from the cap, which includes universities and research institutions.)

IT service firms use H-1B workers in offshore outsourcing contracts. IT workers affected by offshoring decision will typically train their replacements as a condition of severance. This has been the situation, for instance, at Northeast Utilities in Connecticut, which late last year announced plans to outsource some its IT work to Infosys and TCS and cut around 200 IT workers.

"The offshore outsourcing firms are once again getting the majority of the visas," said Ron Hira, a public policy professor at the Rochester Institute of Technology in New York. "The program continues to promote the offshoring of high-wage American jobs."

The tech industry, through lobbying organizations such as Compete America, argues that there is a skills shortage in the U.S., which justifies the need for H-1B visas. The claim of a skills shortage is in dispute, however.

Paul Krugman, a New York Times columnist and Nobel Prize-winning economist, argued in a column Monday that the idea of a skills gap is something "that should have been killed by the evidence, but refuses to die."


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