Outsourcing firms warn of possible H-1B visa cutbacks

Several companies have alerted investors that a changing U.S. political environment could limit access to H-1B and L-1 visas, which they say could hurt their businesses.

In filings with the U.S. Securities and Exchange Commission, offshore and U.S.-based outsourcing firms said they are unsure how the election of Barack Obama and the seating of a new Congress will affect their efforts to maintain adequate visa levels.

Bangalore, India-based Wipro Ltd., one of the largest users of H-1B visas, warned in documents filed shortly after the November elections that "increasing political and media attention" directed at outsourcing may lead to legislation that restricts visa use or "imposes disincentives" to expanding the use of foreign workers in the U.S.

During the presidential campaign, Obama repeatedly promised to "stop giving tax breaks to companies that ship jobs overseas" and to provide incentives to help companies keep jobs in the U.S. Since his election, Obama has not unveiled a detailed plan for H-1B and L-1 visas.

But Obama has nominated for cabinet posts in his administration supporters of increasing H-1B visa caps, including Arizona Gov. Janet Napolitano. In addition, members of his transition team, such as Google Inc. CEO Eric Schmidt, have long been vocal about the need to boost the H-1B cap from its current level of 85,000.

In an October SEC filing, Infosys Technologies Ltd., also in Bangalore, said that almost 7,000 of its employees held H-1B visas at the end of September. Infosys said that 1,500 other workers held L-1 visas, which are used by multinational firms to transfer employees based offshore to the U.S. A year earlier, 7,700 Infosys workers had either L-1 or H-1B visas, the company said.

In its filing, Infosys warned that its "reliance on work visas for a significant number of technology professionals makes us particularly vulnerable" to changes.

In an October SEC filing, Pittsburgh-based IT services provider Mastech Holdings Inc. said that unless Congress "substantially increases the annual H-1B quota," its pool of workers could be reduced. About 40% of Mastech's U.S. workforce have H-1B visas.

This version of the story originally appeared in Computerworld 's print edition.

» posted by ITworld staff

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