In a letter dated May 14, 2007, two US senators-Republican Charles Grassley
and Democrat Richard Durbin, asked nine companies a few questions on how they
used the H1B visas granted to them in 2006.
“We have been concerned about reported fraud and abuse of the H-1B and L visa
programs, and their impact on American workers. We are also concerned that the
program is not being used as the Congress intended,” noted Grassley and Durbin,
justifying the reason behind the exercise.
An extremely sincere effort, one would tend to believe till one looks at the
name of the companies that they chose to target the letter at. One would tend to
believe that they would be the top recipients of these visas.
But no, there was one filter. American companies were ignored by the
The nine firms who received the senators’ letters-Infosys, Wipro, Tata
Consultancy Services, Satyam Computer, Patni, Larsen & Toubro Infotech, i-flex,
Tech Mahindra, and Mphasis-were all Indian companies.
“Your company,” wrote the senators, “was one of the top companies on the
list. Therefore, we are requesting your cooperation in providing additional
statistics and information on your use of H-1B visa workers.”
Microsoft, which was the third largest recipient of such visas; Cognizant,
which was the fifth largest, IBM which was the eighth largest; and Oracle which
was the ninth largest recipients of such visas in 2006 were not considered
important enough by the senators whose answers would be of use to them in
probing the alleged “misuse” of these visas.
On the other hand, MphasiS (ironically, now majority-owned by the American
company EDS) which got just less than one-fourth of the H1-B visas as compared
to Microsoft, was considered important enough to be probed by the senators.
The letter is a shot in the arm for the protectionist lobby in America, which
got a huge mileage during 2004 presidential elections when democratic candidate
John Kerry made offshoring a major election issue. But Kerry’s brand of
protectionism (many say populism) as well as that of Lou Dobbs challenged
liberal labor policies.
Top Recipients of H1-B Visas in 2006
No of H1B Visas granted in 2006
Tata Consultancy Services
Satyam Computer Services
Cognizant Tech Solutions US Corp
Patni Computer Systems Inc
Larsen & Toubro Infotech
HCL America Inc
Deloitte & Touche LLP
Ernst & Young LLP
Tech Mahindra Americas
Deloitte Consulting LLP
Grassley and Durbin have gone two steps further. Kerry’s (and Dobb’s) anti-offshoring
stance challenged both American and foreign companies who practiced offshoring.
Grassley and Durbin’s, on the other hand, clearly discriminates between American
and foreign (incidentally all Indian) companies. “It is not protecting American
workers’ interest; it is protecting American companies’ interest,” says an
industry veteran in India. That may or may not be true, but it surely points to
Not surprisingly, the Indian commerce minister reacted immediately. Kamal
Nath said in a statement from Paris, which he was visiting en route to Brussels
to take part in the Doha round of trade talks, "Temporary movement of skilled
professionals is an essential component of the global services economy and bears
no relation to immigration issues."
"Any move which creates uncertainty and unpredictability about such movements
will naturally have an adverse impact on the rapidly expanding services trade,"
In short, unlike the last time around, this time it has resulted in a serious
trade issue between the US and India. The companies concerned, of course, chose
to take a more cautious approach.
US Universities Among Top Recipients of H1B Visas in 2006
Points and Counterpoints
The senators have raised three points regarding the misuse of H1-B visas.
- Disparity of wages between HI-B visa holders and American workers
- Temporary recruitment of foreign workers and then outsource to offshore
- Large-scale layoffs
All these are, of course, important
The first point-disparity of wages between H1-B visa holders and American
workers-is an issue that has come up against all firms that do offshoring, not
just Indians, time and again and it is better that these companies clarify it
once and for all.
Temporary recruitment of foreign workers and then outsourcing to offshore
locations has not really been done by Indian companies, though there have been
debates again and again that Indian companies need to acquire large American
firms and move the jobs offshore. It may be their plans, but so far few Indian
companies have done that. Most of their overseas acquisition has been for skill
or customer acquisition and never for scale and moving jobs offshore.
The third point hardly makes sense for Indian companies. Indian firms are in
a growing phase and the question of large-scale lay-offs does not arise. If
anything, they are on a hiring spree to build onshore capability in solutions.
It is traditional American firms like IBM and HP that have announced large scale
lay-offs. And they are public announcements. Questioning Indian firms for this
and ignoring such publicly available statements will lead to nowhere. If the
senators are serious about these investigations, they should first look for
publicly available data.
Who Gets the H1-Bs?
Meanwhile, contrary to popular belief, the list of top 100 recipients of
H1-B visa in 2006 is not dominated by Indian companies. A first level analysis
shows that together with other offshore service providers (including American
companies such as Cognizant, which were ignored by the senators), they are
numbered 18-the same as the financial/consulting services companies in the list,
such as McKinsey, Deloitte, Citi, and Morgan Stanley. The non-services tech
companies such as Microsoft, Oracle, Intel, Cisco and Motorola were the second
largest category of H1-B recipient.
But surprisingly, the top category among the H1-B recipients last year was
that of the universities of America. The New York City Public Schools, for
example, received more HI-B visas than Accenture! Harvard, Stanford, Columbia,
Yale-all figured in the list of universities that had the visa power-the HI-B
The US universities are waking up to the call of Tom Friedman and other
intellectuals such as Craig Barrett that you cannot address the problem of
America without addressing the problems of education. They are tackling the
problem in the best way possible-by inviting more H1-B visa holders to teach.
You may call it ironic, but it surely is practical.
If only everyone was wise enough like the centers of excellence in education!