H-1B visa row: IT employees’ transition to green cards remains limited, says Nasscom

Following the suspension by the United States government of several technology firms from applying for green cards or permanent labour certification, a programme that allows companies to hire foreign workers to work permanently in the country, India’s IT/ITES industry body Nasscom has said that Indian tech firms have significantly reduced their dependence on H-1B visas over the past few years and increased local hiring in the US.

In a statement following the US Department of Labour’s actions, the industry body said that immigration and skilled talent mobility are two distinct issues that should not be viewed through the same lens.

“The H-1B visa programme has historically played an important role in addressing short-term skill gaps in the US, and it will continue to be used to address short-term talent gaps,” the statement said.

On Thursday, US Labour Secretary Keith Sonderling announced that the Labour Department would not accept any new or process any pending permanent labour certification applications from Cognizant, Infosys, TCS, Wipro, HCL, Capgemini, Microsoft and Adobe.

“Since 2009, just these companies alone have requested almost 3 million foreign workers. They received over 230,000 H-1B visa approvals and over 100,000 permanent labour certifications. That’s hundreds of thousands of jobs that were taken from American workers,” Sonderling said at a press briefing.

Indian IT firms drive US innovation and jobs

Arguing that the number of employees transitioning from H-1B visas to permanent residency through the PERM process is relatively limited, Nasscom said that Indian IT firms not only work with the majority of Fortune 500 companies in the US but also enable them to innovate and generate more local jobs.

“Indian technology companies operate across more than 80 countries and have consistently demonstrated their commitment to complying with local laws and regulatory requirements. We are confident that they will continue to adhere to applicable regulations in the US as well,” the statement said.

With the BSE IT Index under stress since early this year amid macroeconomic uncertainties and AI advancements weighing on sentiment towards the sector, IT stocks are expected to remain under pressure. Sumit Singhania, Head of Research at Bajaj Broking, said the suspension adds another layer of uncertainty for the sector.

Even as Indian IT stocks may see some near-term volatility due to this decision, “while the immediate impact is likely to be felt through higher hiring and compliance costs for the affected IT companies, particularly as they may need to rely more on local talent and subcontracting, the development could add further pressure to operating margins in the near term,” Singhania said.

TCS to hire 15,000 more employees in the US over five years

Tata Consultancy Services (TCS), India's largest IT services companies, one of the firms affected by the suspension said that it will comply with any directive from the Department of Labor.

“Our workforce strategy in the US is anchored in hiring local talent, supported by a robust campus recruitment model. We have built a significant local workforce across 31 offices and delivery centres throughout the country,” the statement said.

Additionally, TCS said it intends to hire an additional 15,000 people in the US over the next five years. “Our PERM applications were in single digits in the last two years, and hence, we do not expect the suspension of the programme to impact our workforce strategy and customer engagements,” it said.