On 22 June, US President Donald Trump issued a proclamation to suspend issuing of H-1B, H-2B, J, L, and other temporary work permits for immigrants until December 31, 2020, with the stated aim of this sweeping policy being to stop foreign workers snagging American jobs, especially at a time of deep economic distress brought on by the COVID-19 pandemic.
Most of the big IT firms use H1-B visa to bring in employees from India into the US, and complete the client’s works, at much lower pay, compared to US workers. But now, since the H1-B visa has been suspended, this business model will suffer. IT firms will need to hire more locals in America to complete the work, and pay more money, and get fewer profits.
The below table elaborates company-wise total numbers of employees in the USA, local staff, and dependency on H1-B Visas. Based on dependency on H1-B visas, this table helps us to understand the impact of H1-B Visa suspension on the top IT Companies like TCS, Infosys, Cognizant, Wipro, HCL, and Tech Mahindra.
TCS and Infosys
- TCS has the largest number of people working in the US as compared to other IT companies with 54,874 employees.
- On the total strength, only 40% are on visas and the rest are local employees.
- Within those who are in the US on a visa, 85% are on an H-1B and the others are on L-1 visas.
- Like TCS, Infosys too only has 40% visa holders as US staff.
- In the last 2 years, Infosys has implemented localization initiative at scale in the US, recruiting more than 10,000 US nationals or permanent residents and significantly reduced our dependence on visas.
- It means TCS and Infosys are well prepared to address H-1B visa suspension challenges and will not be impacted so much.
Tech Mahindra and Cognizant
- Tech Mahindra and Cognizant are the only two companies with 50% of their employees in the US on visas.
- This means that the H1B visa suspension will have a maximum impact on Tech Mahindra and Cognizant.
Wipro and HCL Technologies
- Wipro and HCL Tech have the lowest dependency on the visa with only 35% of their staff in the US being non-local.
- This means that the H1B visa suspension will have the least impact on Wipro and HCL Tech.
The experts said that the industry had prepared itself for unrealistic immigration challenges by not overly depending on H-1B visas. Most IT companies are focused on local hiring and training a lot more engineers. So India’s own applications for H-1B visas have reduced. The impact on India or on Indian companies will be less in the short-term.
Bibliography- Business Insider, CNBC, and Trak.in