PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

Software/IT Services/Business Process Outsourcing
Though the global recession that began in 2007 has reduced
pressure for the moment, in recent years, demand for visas has
greatly exceeded supply. In April 2007, when the application period
opened for visas with an October 2007 start date, nearly 150,000
applications flooded in for the 65,000 basic H-1B slots, and the
application process was closed within 48 hours. The April 2008
application process closed in only one day after being flooded with
163,000 applications.
In 2008, eight of the top fifteen H-1B recipient companies were
outsourcing firms. The top four were Indian companies. All these
firms, including the non-Indian outsourcing firms and three large
U.S. technology companies, have a substantial back office/R&D
center presence in India.
These numbers, however, do not reveal the full extent of the visa
story. The H-1B cap fell in 2004 just as demand began to grow
dramatically. In particular, demand from the outsourcing sector
competes with applications from technology firms looking to directly
import scientific, engineering and programming support. While a
major Silicon Valley company might submit applications numbering
in the hundreds or low thousands, Accenture and Deloitte & Touche
each filed 7,000–8,000 applications in 2006; Infosys and Wipro filed
22,600 and 19,400, respectively. Some of these were multiple
applications for a single worker in different jobs.
As the 2004 H-1B visa caps were extended, companies applied for
L-1B temporary visas (which had no cap or pay requirements) for
workers with specialized skills. Where Indian nationals received
10% of L-1B visas in 2002, they received 48% in 2005, while the
total number of visas stayed constant at about 40,000. When
Siemens Information Communications Networks decided to outsource
some of its IT functions to Tata Consultancy Services
(TCS) as a cost-cutting step, TCS brought a group of L-1B workers
from India to Florida for “training” by the employees they were to
replace. The story attracted attention in Congress and prompted
hearings and reform of the L-1 program.
Restrictions were put in place in 2008 to prohibit multiple applications
for the same worker. U.S. free trade agreements with Chile
and Singapore provide for H-1B worker set-asides that lower the
65,000 visa cap to 58,200. And in February 2009, Congress extended
additional visa application restrictions for “H-1B-dependent
employers”—those with visa workers making up 15% or more of
their workforces—to any firm receiving TARP or TALF government
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