H-1B applications down sharply in February

The number of applications for H-1B visas filed by U.S. companies on behalf of foreign workers dropped sharply last month as the economy slowed, according to numbers released yesterday by the U.S. Immigration and Naturalization Service (INS).

The INS said 16,000 H-1B applications were submitted in February, down from 30,000 in January. Both months' figures fell well below the 53,000 applications filed in December, although that total is thought to have been inflated by companies rushing to beat a fee increase that took effect during the middle of that month.

The 16,000 figure is also just half of number of applications filed in February last year. INS officials didn't comment on the likely reasons for the drop-off, but Bill Keller, an analyst at Gartner Inc. in Stamford, Conn., said the change could be attributed to the slowing economy and recent layoffs by numerous technology vendors.

"As the layoffs trickle through the technology marketplace, there are a lot more Americans available for jobs," Keller said. And that means companies have less need to recruit workers from overseas, he added.

The latest H-1B figures come two weeks after the Federal Reserve Board released survey results showing that employers in a half-dozen metropolitan areas are having an easier time finding qualified IT workers. The survey, which tracks business and economic conditions in the U.S. eight times a year and is known as The Beige Book, cited reduced job-hopping, layoffs and slackened demand for new workers as contributors to an easing of the technology skills shortage (see story).

Congress raised the number of visas allotted to H-1B workers annually from 115,000 to 195,000 in October, after months of pressure from employers. But companies such as San Francisco-based IT consulting firm Gobosh Inc. and Dallas-based Texas Instruments Inc. have said they plan to either hire fewer H-1B holders this year or keep the hiring to about the same level as last year.

As of March 7, about 72,000 H-1B visas had been approved for the government's current fiscal year, which ends Sept. 30, said INS spokeswoman Eyleen Schmidt. As many as 66,000 more applications are pending, she added. By this time last year, companies had already exhausted the 115,000 visas that were available during fiscal 2000.

Critics said the decline in demand for foreign workers after the visa cap was increased highlights flaws in the H-1B system.

"I think what this shows is we simply don't have an immigration system that works well in the marketplace," said Paul Donnelly, an organizer at the Immigration Reform Coalition, a Washington-based advocacy group that has lobbied the government to issue permanent green cards instead of temporary visas. Of particular concern is what happens to H-1B holders who are laid off, Donnelly said.

A 38-year-old IT consultant and H-1B holder, who asked not to be identified, said he's afraid the company that he works for will send him back to his native India when his current project ends in the next two months. "I don't know what will happen if I don't get [another] position," he said.

Schmidt said H-1B holders who get laid off are deemed "out of status" and have 10 days to leave the country. Even if a foreign worker with a visa gets another job offer, Schmidt added, he would have to submit paperwork to the INS showing that the previous H-1B status was lost due to "extraordinary circumstances."

Related stories:

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