Monday, February 2, 2009

Silicon Valley Job Cuts Hit H1-B Visa Holders

Silicon Valley is hurting. Intel, Microsoft, and other high technology giants are announcing tens of thousands of layoffs. Unemployment in Silicon valley hit a new high of 7.8% in January, 2009. Many of the high-tech companies rely on foreign-born technologists, particular those from India, China, Israel, Pakistan, Philippines, and other nations. Thousands of these workers are facing the ax, with the H1-B workers particularly fearing the worst.

When times were good, the high-tech companies lobbied for and got over 100,000 yearly H1-B visas approved by U.S. Congress. The largest number of workers who were hired with the H1-B visas were of Indian origin. Some of them suffered abuse at the hands of their employers and the intermediaries who helped place them. "H1-B slavery" was the term used to describe their situation.




Things have changed dramatically in the last few months. And they are going to get much worse in 2009. In a letter addressed to Microsoft, U.S. Senator Charles Grassley has asked the company to layoff foreign workers before laying off skilled American workers.

Today's San Jose Mercury News has highlighted the plight of two Indian engineers on H1-B visas who recently lost their jobs. For them, it's a race against time. They need to quickly find other jobs at a time when companies everywhere are cutting back. Both Jay and Prasad (fictitious names) have advanced degrees earned from elite American universities. And both are facing the inflexible rules of their H-1B work visas.

Technically, as soon as they lost their jobs, they were required to leave the country. In reality, they can probably stick around for a week or two, but not much longer.

There are no statistics available yet on how many of the job cuts have already hit or soon expected to hit H1-B workers. But San Jose Mercury is reporting that this "stark dilemma is being repeated with increasing frequency across Silicon Valley, according to immigration specialists, as companies downsize to weather a punishing downturn. It's a small number compared with the layoffs of H-1B visa holders during the dot-com crash. But the downturn has sent a wave of concern through the community of immigrant workers who hold the visa, which companies use to hire skilled noncitizens."

Dot com bust in 2000-2001 followed by post-911 economic slow-down were hard on H1B visa holders. The running joke at the time was that B2B stood for Back-to-Bangalore, not business-to-business. But, somehow, the smart techies survived and then thrived. Short term, things are going to be particularly tough again. But, eventually, there will be a rebound and the highly-educated and smart people like Jay and Prasad are going to do very well. Their hard work and persistence will pay off. My message to Prasad and Jay is: Hang in there , Guys! Don't give up hope! Things will get better.

12 comments:

Anonymous said...

Thank you for this very touching post Riaz. Even if its the same fictitious Jaydev who writes very fanatic stuff on you blog, i pray that he lands a job soon.

Riaz Haq said...

Request received via email:

I have read the article and would like to take advise for my son employment in microsoft. He was selected by Microsoft in April 2008.His HIB visa granted in NOvember 2008, He was interviwed on Nov 12 2008 at USA Consulate but still waiting for the clearence from the State Department Washington.Microsoft
also arranged for his working visa for Canada, whivh is valid. Microsoft informed him about the job cuts in Microsoft, but have given him the assurance that they do not intend to
with draw his offer of employment and rather eager to see him in Microsoft Silicon velley subject to security clearence. From Nov 2008 he is enemployed,as he was expecting vis in a month time.

I would appreciate your professional advise

Here's my email response:

I think Microsoft will honor its commitment to your son.
However, if things continue to deteriorate and Microsoft is forced to announce more layoffs of US workers, then all bets are off.
High-profile companies like Microsoft will come under a lot of political pressure from US Congress and may have to back out.
But they are are a big company and they have to maintain their trust. They will not lie to you. They will tell you if the situation changes in the future.

Anonymous said...

Would the Indian government be willing to grant open ended work visas for Indian companies to hire the hundreds of thousands of laid off US tech workers?
No, I didn't think so.

Anonymous said...

read the comments by Romesh Chander and the follow up. LOL.

http://online.wsj.com/article/SB126012590544978989.html#articleTabs%3Dcomments

Riaz Haq said...

In spite of the discrimination by some Indian hiring managers at Microsoft that is rightly pointed out by a white female commenter on the Wall Street Journal website, Microsoft has been and continues to hire in Pakistan, though the pace has considerably slowed since the financial crisis last year and imposition of new visa restrictions.

Riaz Haq said...

The BBC is reporting that Dubai crisis is impacting a remote village in Bihar:

In August 2008, Bharat Bhushan Tiwari - from Akhopur village in eastern Indian Bihar - took a loan of 71,000 rupees ($1,500) from a village moneylender to pay a local agent who had arranged a job for his son in Dubai.

Mr Tiwari - who runs a small shop - was hoping for better days for his family of five by sending his second son, Jay Kumar Tiwari, to the Gulf country.

Jay Kumar had got a job as a carpenter in a Dubai-based construction company and had big dreams - he wanted to earn a lot of money to pull his family out of grinding poverty.

But last month, their dreams came crashing down when Jay Kumar was asked by the company officials to quit by 6 March 2010.

'Cruel joke'

Dubai has been hit by an unprecedented financial crisis and the tremors are being felt in far away Bihar.

"This has been a cruel joke on our fate," Bharat Bhushan Tiwari told the BBC, trying to fight back his tears.

His other two sons are also unemployed and the Tiwari family now prays that the situation improves in Dubai.

Riaz Haq said...

Here's a 2010 Times of India sory on illegal immigration into US from India:


WASHINGTON: In 2009, India accounted for the third highest increase in the number of illegal immigrants in the US in ten years, according to a new government report, though only two percent of all illegal immigrants were Indians.

The number of illegal immigrants in the US fell by seven percent to 10.8 million last year.

A majority of them came from Latin America, according to the department of homeland security (DHS) report, though India with 200,000 was the sixth biggest sender of illegal immigrants to the US.

In overall numbers, Indians accounted for only two percent of illegal immigrants. Mexico (6.7 million) topped the list with 62 percent, followed by those from El Salvador (530,000), Guatemala (480,000), Honduras (320,000) and the Philippines (270,000).

Between 2000 and 2009, the Mexican-born unauthorised immigrants increased by two million or 42 percent. But the greatest percentage increases occurred among unauthorised immigrants from Honduras (95 percent), Guatemala (65 percent), and India (64 percent).

"The number of unauthorised residents declined by one million between 2007 and 2009, coincident with the US economic downturn," said the report based on census data and extrapolations from the total foreign population in the country.

Beside the US and global financial crisis, other reasons the report adduces for the drop in the undocumented population include tougher border enforcement and a national crackdown on illegal immigrants.

The overall annual average increase in the unauthorised population during the 2000-09 period was 250,000 with ten leading countries of origin representing 85 percent of the unauthorised immigrant population in 2009.

Of the nearly 11 million undocumented people living in the US in January 2009, 37 percent, or four million, arrived since January 2000, 44 percent since the 1990s and 19 percent since the 1980s, the DHS said.

Between January 2008 and January 2009, the number of unauthorised immigrants living in the US decreased seven percent from 11.6 million to 10.8 million after growing from 8.5 million to 11.8 million between 2000 and 2007, DHS said.

An estimated 8.5 million of the 10.8 million unauthorised immigrants living in the US in 2009 were from the North America region, including Canada, Mexico, the Caribbean, and Central America. The next leading regions of origin were Asia (980,000) and South America (740,000).

California remained the leading state of residence of the illegal immigrants in 2009, with 2.6 million, followed by Texas (1.7 million), Florida (720,000), New York (550,000) and Illinois (540,000).

California's share of the national total was 24 percent in 2009 compared to 30 percent in 2000. The greatest percentage increase in the illegal population between 2000 and 2009 occurred in Georgia (115 percent), Nevada (55 percent) and Texas (54 percent).

In 2009, 61 percent of unauthorised immigrants were aged 25 to 44 years, and 58 percent were male. Males accounted for 62 percent of the illegal population in the 18 to 34 age group in 2009 while females accounted for 52 percent of the 45 and older age groups.



Read more: Indian illegal immigrants in US up 64 percent last decade - The Times of India http://timesofindia.indiatimes.com/world/indians-abroad/Indian-illegal-immigrants-in-US-up-64-percent-last-decade/articleshow/5554881.cms#ixzz1Cfty49sl

Riaz Haq said...

Thousands of Indian illegal immigrants are slipping into Texas from Mexico, according to LA Times:

Reporting from Harlingen, Texas — Thousands of immigrants from India have crossed into the United States illegally at the southern tip of Texas in the last year, part of a mysterious and rapidly growing human-smuggling pipeline that is backing up court dockets, filling detention centers and triggering investigations.

The immigrants, mostly young men from poor villages, say they are fleeing religious and political persecution. More than 1,600 Indians have been caught since the influx began here early last year, while an undetermined number, perhaps thousands, are believed to have sneaked through undetected, according to U.S. border authorities.

Hundreds have been released on their own recognizance or after posting bond. They catch buses or go to local Indian-run motels before flying north for the final leg of their months-long journeys.

"It was long … dangerous, very dangerous," said one young man wearing a turban outside the bus station in the Rio Grande Valley town of Harlingen.

The Indian migration in some ways mirrors the journeys of previous waves of immigrants from far-flung places, such as China and Brazil, who have illegally crossed the U.S. border here. But the suddenness and still-undetermined cause of the Indian migration baffles many border authorities and judges.

The trend has caught the attention of anti-terrorism officials because of the pipeline's efficiency in delivering to America's doorstep large numbers of people from a troubled region. Authorities interview the immigrants, most of whom arrive with no documents, to ensure that people from neighboring Pakistan or Middle Eastern countries are not slipping through.

There is no evidence that terrorists are using the smuggling pipeline, FBI and Department of Homeland Security officials said.

The influx shows signs of accelerating: About 650 Indians were arrested in southern Texas in the last three months of 2010 alone. Indians are now the largest group of immigrants other than Latin Americans being caught at the Southwest border.

Riaz Haq said...

Indian IT services company Infosys has come under scrutiny for bringing in low wage Indians on business visas to work on projects to get around limits on numbers of H1-B visa allowed each year, according to NY Times:

Last week, Representative Zoe Lofgren of California, the senior Democrat on the immigration subcommittee of the House Judiciary Committee, introduced a bill that would increase the wages employers would have to pay H-1B workers, in an effort to ensure they do not undercut Americans. The measure is specifically aimed at Indian outsourcing companies. Last year, Congress added an extra $2,000 to the fee for H-1B visas, in another move aimed at the Indian companies.

Yet the criminal investigation is perhaps the most worrisome development for Infosys, which enjoys a reputation as one of India’s best-run and most respected companies. The events began with Mr. Palmer, 43, a project manager from Alabama who was hired by the company in 2008. In a sworn affidavit he submitted to the federal court, Mr. Palmer said his differences with Infosys management began after he was summoned to a meeting in Bangalore in March 2010. Top executives, he said, discussed ways to “creatively” get around H-1B visa limitations “to fulfill the high demand for its customers at lower cost.”

In general, B-1 visas are granted to business visitors coming to the United States for short stays to attend meetings, conferences or training sessions, or to install specialized equipment. Visitors may not be employed for contract work like H-1B workers, nor can they be paid salaries in this country. There is no annual limit on business visitor visas, whereas H-1B visas are restricted to 85,000 a year.

Mr. Palmer said his supervisors asked him to write letters inviting workers to come from India for sales and training meetings, letters he believed were false. “I refused to write the letters,” he said.

After word got out of his refusal, Mr. Palmer said, he was chastised by his managers and began to receive threats by e-mail and telephone. In October, Infosys has confirmed, Mr. Palmer filed a whistle-blower report about B-1 visa holders from India assigned to projects he or others managed. His report said the B-1 visa holders were doing the same tasks as workers on H-1B visas, including writing and testing software code. Mr. Palmer said he personally knew of at least 60 Indian workers doing contract work on B-1 visas.


http://www.nytimes.com/2011/06/22/us/22infosys.html?scp=1&sq=infosys&st=cse

Riaz Haq said...

The jobs stolen by Indian and other foreign IT firms to hire code coolies in their country have cost the US middle class many many trillions of dollars and decimated their std of living in America.

Even Andy Grove, former Intel CEO, believes outsourcing has been a disaster for America:

Such evidence stares at us from the performance of several Asian countries in the past few decades. These countries seem to understand that job creation must be the No. 1 objective of state economic policy. The government plays a strategic role in setting the priorities and arraying the forces and organization necessary to achieve this goal. The rapid development of the Asian economies provides numerous illustrations. In a thorough study of the industrial development of East Asia, Robert Wade of the London School of Economics found that these economies turned in precedent-shattering economic performances over the '70s and '80s in large part because of the effective involvement of the government in targeting the growth of manufacturing industries.

And:


However, our pursuit of our individual businesses, which often involves transferring manufacturing and a great deal of engineering out of the country, has hindered our ability to bring innovations to scale at home. Without scaling, we don't just lose jobs -- we lose our hold on new technologies. Losing the ability to scale will ultimately damage our capacity to innovate.


http://www.drudge.com/archive/136003/intel-exec-outsourcing-national-suicide

Riaz Haq said...

Here's a Guardian Op Ed on disappearing middle class jobs in America and Europe:

...."Knowledge work", supposedly the west's salvation, is now being exported like manual work. A global mass market in unskilled labour is being quickly succeeded by a market in middle-class work, particularly for industries, such as electronics, in which so much hope of employment opportunities and high wages was invested. As supply increases, employers inevitably go to the cheapest source. A chip designer in India costs 10 times less than a US one. The neoliberals forgot to read (or re-read) Marx. "As capital accumulates the situation of the worker, be his payment high or low, must grow worse."

We are familiar with the outsourcing of routine white-collar "back office" jobs such as data inputting. But now the middle office is going too. Analysing X-rays, drawing up legal contracts, processing tax returns, researching bank clients, and even designing industrial systems are examples of skilled jobs going offshore. Even teaching is not immune: last year a north London primary school hired mathematicians in India to provide one-to-one tutoring over the internet. Microsoft, Siemens, General Motors and Philips are among big firms that now do at least some of their research in China. The pace will quicken. The export of "knowledge work" requires only the transmission of electronic information, not factories and machinery. Alan Blinder, a former vice-chairman of the US Federal Reserve, has estimated that a quarter of all American service sector jobs could go overseas.

Western neoliberal "flat earthers" (after Thomas Friedman's book) believed jobs would migrate overseas in an orderly fashion. Some skilled work might eventually leave but, they argued, it would make space for new industries, requiring yet higher skills and paying better wages. Only highly educated westerners would be capable of the necessary originality and adaptability. Developing countries would obligingly wait for us to innovate in new areas before trying to compete.

But why shouldn't developing countries leapfrog the west? Asia now produces more scientists and engineers than the EU and the US put together. By 2012, on current trends, the Chinese will patent more inventions than any other nation. As a new book – The Global Auction (by sociologists Phillip Brown, Hugh Lauder and David Ashton) – argues, the next generation of innovative companies may not be American or British and, even if they are, they may not employ American or British workers.

It suggests neoliberals made a second, perhaps more important error. They assumed "knowledge work" would always entail the personal autonomy, creativity and job satisfaction to which the middle classes were accustomed. They did not understand that, as the industrial revolution allowed manual work to be routinised, so in the electronic revolution the same fate would overtake many professional jobs. Many "knowledge skills" will go the way of craft skills. They are being chopped up, codified and digitised. Every high street once had bank managers who used their discretion and local knowledge to decide which customers should receive loans. Now software does the job. Human judgment is reduced to a minimum, which explains why loan applicants are often denied because of some tiny, long-forgotten overdue payment.

Brown, Lauder and Ashton call this "digital Taylorism"....

Riaz Haq said...

Here's a Guardian story on US penalizing Infosys for violating visa restrictions:

Infosys Ltd said on Wednesday it has reached a $34m settlement with US authorities in a case involving the widespread practice by Indian firms of flying workers to client sites in the United States on temporary visas.

The fine, which the US Department of Justice said is the largest in a case of its kind, comes as US lawmakers consider legislation that would make it more difficult and costly for Indian IT firms to send workers to the United States on temporary, restricted visas.

"Infosys denies and disputes any claims of systemic visa fraud, misuse of visas for competitive advantage or immigration abuse. Those claims are untrue and are assertions that remain unproven," Infosys said in a statement.

"There were no criminal charges or court rulings against the company. Furthermore, there are no limitations on the company's eligibility for federal contracts or access to US visa programs as a result of the settlement," it said.

Infosys, India's second-largest IT services exporter, employs roughly 15,000 people in the United States. As of March 31, about 10,800 of those were on H-1B visas, which allow an employee to stay and work in the United States up to six years, and 1,600 were on temporary L-1 visas, a company filing said.

The US investigation focused on the use of B-1 business visas and I-9 forms, Infosys has said. I-9 forms verify the identity of employees and their authorisation to work in the United States. A person on a B-1 visa in the United States can participate in meetings but is not allowed to work.

"It is likely to add more fuel to the ongoing debate around visa reforms," Chirajeet Sengupta, practice director in Mumbai at Everest Group, which advises clients on technology vendors, said on Tuesday after reports that a settlement was imminent.

"These reforms, if executed, have the potential to impact Indian service providers' landed resource model that is largely driven by access to H-1B visas in large numbers," he said.

In its statement, Infosys said only 0.02% of the days that Infosys staff worked on US projects last year were performed by people on B-1 visas.

"The Company's use of B-1 visas was for legitimate business purposes and not in any way intended to circumvent the requirements of the H-1B program," the Bangalore-based company said.

Infosys has secured roughly one B-1 visa for every 10 H-1B visas, according to a person with direct knowledge of the matter who declined to be identified.

US authorities have been looking into Infosys' use of visas since 2011. Earlier this month, Infosys set aside a reserve of $35m, including legal fees, as it worked towards a resolution of the US investigation.

The case is "an important event in the annals of Indian IT industry," Sundararaman Viswanathan, a consultant in Bangalore with Zinnov, which advises US corporations on sending outsourcing work to India, said ahead of the settlement.

"This is a common issue amongst all the Indian service providers – just that Infosys had to deal with it," he said.

"Though the Indian service providers do not intend to flout the visa regulations, there was definitely a lack of regard for certain norms and procedures. This will be fixed. There will be an increase in onsite hiring," he said.


http://www.theguardian.com/world/2013/oct/30/infosys-34m-settlement-us-department-justice-visa