The United States has declared major changes in the process of visa approval under the H-1B visa program. From next year onwards, the visa approval process would give more importance to applicants who have better skills and higher wages. However, it has been anticipated that it would have less impact on the Indian IT firms.
Most Indian IT companies have already cut down their reliance on H-1B visas. These companies have been hiring more people from the US labor pool in the past few years. It has been reflected in the latest quarterly earnings and company statements.
How Indian IT Companies Are Managing H-1B Hiring
- Tata Consultancy Services (TCS) has been one of the biggest users of the H-1B visa program. Last year, the company inducted 5,500 people in the workforce using the H-1B visa program. However, this year the number saw a significant drop to only 500 people.
- Infosys is doing the same. The company said that its US employee base is largely comprised of local talent. Infosys also continues to hire people with an H-1B visa. However, the hiring is not very frequent.
- Wipro has reported that approximately 80 percent of its total employee base in the US is local. The company has hired only 250 people on H-1B visas in the past five years. LTI Mindtree reported that they have transferred 250 to 300 people from India to the US on H-1B visas this year.
- Tech Mahindra and HCL Technologies are also reported to be cutting down their hiring of H-1B visas in large numbers.
Impact on IT Stocks
- After the announcement about the new visa rules by the US government, Indian IT stocks appeared weak. The stock prices for Tech Mahindra, Wipro, and Coforge declined between 0.7 percent and 1 percent. The stock prices for Infosys declined by 0.5 percent. The stock prices for TCS fluctuated.
- In sum, although the new H1-B visa rules represent a shift in government policy, Indian IT firms appear to be ready for the impact of the new rules because of their efforts to employ more local talent in the US.
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