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Outsourcing firms warn of H-1B visa cutbacks

SEC filings show H-1B needs could be hurt by uncertain political climate

December 17, 2008 12:00 PM ET

Computerworld - In filings with the U.S. Securities and Exchange Commission, companies that use H-1B and L-1 visas are alerting investors that it may become more difficult to obtain them in the future. Some firms are also noting that they don't know whether President-elect Barack Obama and the new Congress will help them get adequate numbers of visas.

Bangalore, India-based Wipro Ltd., one of the largest users of H-1B visas, warned in an SEC filing shortly after the November presidential election that the "increasing political and media attention" directed at outsourcing may lead to legislation that restricts visa use or "imposes disincentives" to expanding offshore programs.

During the presidential campaign, Obama repeatedly promised to "stop giving tax breaks to companies that ship jobs overseas" and to provide incentives that help companies keep jobs in the U.S. Since his election, Obama has not unveiled a detailed plan for H-1B visas.

But Obama has nominated supporters of increasing H-1B visa caps, such as Arizona Gov. Janet Napolitano, to cabinet posts. In addition, members of his transition team, such as Google Inc. CEO Eric Schmidt, have long been vocal about the need to boost H-1B limits. In fact, India's major high-tech trade group, the National Association of Software and Services Companies (NASSCOM), issued a statement the day after the election noting its support for many of Obama's policies, including expanding the H-1B program.

For some companies, visa numbers are substantial. For example, in its SEC filing, Infosys Technologies Ltd., also based in Bangalore, said that almost 7,000 of its employees held H-1B visas at the end of September. In addition, Infosys said that 1,500 of its workers held L-1 visas, which are used by multinational firms to transfer employees. A year earlier, 7,700 Infosys workers had either an L-1 or H-1B visa, the company said. Infosys also repeated warnings made in earlier filings that its "reliance on work visas for a significant number of technology professionals makes us particularly vulnerable" to changes in visa laws. Infosys is one of very few outsourcing companies that included specific H-1B numbers in SEC documents.

Smaller firms also said that legislation aimed at changing visa laws could hurt them. Pittsburgh-based IT services provider Mastech Holdings Inc., which has operations in India, said in in an October SEC filing that unless Congress "substantially increases the annual H-1B quota," its pool of workers could be reduced. About 40% of its U.S. workforce have H-1B visas, Mastech said, adding that it employed 619 consultants at the end of June.

Robert Meltzer, the CEO of VisaNow.com Inc., an immigration services provider in Chicago, said that many of the companies may be most concerned with potential legislation aimed at the L-1 visa, which has no cap. The H-1B cap is currently set at at 85,000, including 20,000 set aside for advance degree holders.



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