Demand for H-1 B down by 50% due to IT slump

BANGALORE: The slump in demand for IT, combined with protectionist pressures in the US, has led to a dramatic decline in the demand for H-1 B visas. The US Citizenship and Immigration Services (USCIS ) has announced that it has received only 32,500 applications for H-1 B visas — or about 50% of the available quota of 65,000 — during the five-day window that it had provided for. And since the quota is nowhere near being met, the USCIS has said companies can continue filing these applications.

Just last year, it had received 1,31,800 applications — or twice the available quota — in the five days it accepted them. In 2007, the number of applications exceeded the quota on the first day the government began accepting them and compelled the USCIS to stop accepting applications after two days. In both years, it then used a lottery to award the visas.

H-1 B visas have been used by companies to bring foreign workers into the US mostly for IT work. In recent years, about 60% of the recipients of these visas have been Indians . Infosys, Wipro and Satyam together are said to have received 9,154 visas last year. The same for Microsoft was 1,037 and Intel 351.

The demand had encouraged many to call for an increase in the visa cap to at least 100,000. That move will now certainly falter. But it’s unlikely that the number of applications this year will fall short of 65,000, something that last happened 13 years ago. Navneet S Chugh, attorney in the US-based The Chugh Firm, said he expects the quota to get filled by the end of the year. “It’s unlikely it will last till September 30, 2010, as it is supposed to,’’ he said. He expects Indian numbers will continue to be around 60% this year.

This year’s decline in demand for H-1 Bs is seen to be on account of three reasons: one, the sharp decline in IT demand in the US because of the recession; two, the preference to do the same work offshore, in locations like India , where it’s significantly cheaper; and three, the protectionist pressures in the US, which is pushing US companies to prefer Americans to do the same jobs.

Microsoft had said it planned to file substantially fewer H-1 B applications because of the economic downturn. T V Mohandas Pai, head of HR in Infosys Technologies, said the fewer applications is a reflection of the business climate . “But the H-1 B window is not yet closed,” he said, suggesting that the company could file more applications.

Stella Nagesh, head of immigration (APAC) in Perot Systems, said she does not entirely blame it on recession. “Companies are generally tightening travel and therefore their spends on visas. Earlier, each company would keep hundreds of visas ready. It was a purely anticipation driven process. Also, companies are increasingly spreading their geographic footprint beyond the US and to the domestic market.’’