The Trump administration may suspend the H-1B and L-1 visas beyond September. According to a Kotak Institutional Equities report, this could possibly impact the talent supply chain for IT services and US technology firms.
Read to find out more…
Delay in Visa Approval Process!
The possible suspension comes at the back of rising employment in the US, which has now crossed 40 million amidst the COVID-19 crisis.
The Trump administration in an executive order signed on April 22 had suspended immigration for 60 days. It stated that non-immigrant visas such as H-1B will be reviewed within a 30-day period which ended on May 22 to ensure that American workers are not impacted.
The report added that an order related to this regard could be expected in the next 1-2 weeks. “Such an order will not impact processing of visa applications, but can deny entry to applicants into the US even with approved visas. In case of such an event, duration of the prohibition is important.”
If it is a temporary ban for 60-90 days, it will not have a material impact since any visas approved would come under the financial year starting October 2020. However, any ban into the US beyond September can impact the supply chain of talent for IT services companies, the report added.
The report stated that Increased localisation efforts could help control damage to some extent.
Will The IT Firms Receive A Massive Hit Due To The Immigration Issues?
Since the imposition of strict visa regulations like increased denial rates and requests for evidence by the Trump administration since 2017, the top IT firms in the last few years have reduced their dependence on H-1B.
IT giants such as Infosys, Tata Consultancy Services (TCS), HCL Technologies and Wipro have stepped by their localisation efforts with more than 50% of their workforce now comprising American employees. According to TCS’ annual report, close to 20,000 American employees have been hired by the company over the last 5 years.
These efforts over the last few years would to some extent contain the damage arising due to the US presidential elections as well.
Furthermore, the report said, “Tier 1 IT companies are in a good position to manage supply constraints due to further restrictions on H-1B visas provided these restrictions are for a brief period.”
Indian Tech Companies With Least H-1B Employees in the US?
Among the tech firms, Amazon, Google, Microsoft, Facebook, Apple and Intel are one of the top H-1B employers with an approval rate of more than 96%.
Amazon, Microsoft and Google alone have close to 20,000 petitions approved. They are followed by Facebook and Apple at more than 7,000 approved visas, the report unveiled.
Among Indian firms, Infosys recorded the least approval rate for H-1B petitions at 68.2% for the year-ending September 2019. Total number of petitions approved for Infosys was 8,053.
Cognizant and TCS are the largest employers with total approved visas standing at 19,333 and 7,592 respectively. Percentage of petitions approved was 69% for Cognizant and 78% for TCS.
The report reveals that the number of approved H-1B visas have declined by more than half since 2017. For TCS, approved petitions in 2017 was 14,953 whereas in 2019, it was 7,592. Similar trends could be found in Infosys, HCL Tech and Wipro.