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5/15/2007
04:16 PM
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Majority Of U.S. Staffers At Indian Outsourcers Are On H-1B Visas

Tata Consultancy Services employs about 8,000 foreign nationals working in the U.S. on H-1B visas and Infosys has 7,100.

Infosys, Wipro, and Satyam all rely on the H-1B guest worker visas for the majority of their U.S. employees, according to filings this month with the Securities and Exchange Commission. These Indian companies' extensive use of H-1B visas is facing increased scrutiny as politicians make the issue a flashpoint in the political debate over H-1B reform.

This week, U.S. Sens. Chuck Grassley, R-Iowa, and Dick Durbin, D-Ill. -- both of whom sit on the Senate Judiciary Committee's immigration subcommittee -- accused the Indian companies of using H-1B visas to, in Grassley's words, "displace qualified American workers." They sent letters to the CEOs of the top nine foreign-based visa users, including Infosys, Wipro, and Tata, asking for details about how they use their H-1B visas.

Tata Consultancy Services employs about 8,000 foreign nationals working in the U.S. on H-1B visas, said a company executive, and Infosys has 7,100, not including business process outsourcing workers or subsidiaries, according to SEC filings. Wipro and Satyam don't cite specific numbers in their SEC filings, but note that H-1B workers make up the vast majority of their U.S. staff.

These companies make no secret of how important these visas are to their businesses, since many projects require a person to work at the client's site, often for months at a time. Changing political winds pose a risk to their businesses, as Wipro says in its filing: "Our reliance on work visas for a significant number of associates makes us particularly vulnerable to such changes and variations as it affects our ability to staff projects with associates who are not citizens of the country where the work is to be performed."

Infosys notes that the availability of visas -- and its considerable visa-related expenses -- vary greatly quarter to quarter.

"Visas for working in the United States may be available during one quarter, but not another, or there may be differences in the number of visas available from one quarter to another," InfoSys says in its filing. For example, the company's visa expenses were $11 million for the three months ended June 30, compared with $3 million for the three months ended March 31, 2006. It's a big enough expense to affect "operating margins and profitability in certain quarters," InfoSys says.

The Indian companies aren't hiding the importance of H-1B visas to their business. All four of these companies derive the majority of their income from the U.S. The SEC filings make clear that their businesses depend on keeping their large customers happy, most of them in the U.S. or, to a lesser extent, Western Europe, where they rely on temporary work visas for some portions of projects. InfoSys, for example, got 19% of its total revenue from its top five clients the past year.

TCS each year applies for "the exact number" of H-1B workers that the company estimates it needs to send to the U.S. for client engagements, said S. "Paddy" Padmanabhan, TCS executive VP and head of global HR, in an interview.

That's been ranging from about 1,000 to 2,000 H-1B visa petitions per year. He said the company has been fortunate in getting the number of visas it needs. The company has about 8,000 H-1B visa workers in the U.S. right now. Typically, those people are assigned to project work that lasts six months to 12 months, although some will stay in the U.S. working for several years. H-1B visas are good for three years, and can be renewed once for a total stay of six years in the U.S.

About 99% of TCS's H-1B workers return to India, rather than seek green cards, or permanent residency, to stay in the U.S., said Padmanabhan.

Among the big complaints by U.S. tech employers -- including Oracle and Microsoft -- about the H-1B and green card programs is that many bright and talented foreigners are denied H-1B visas even after being educated at U.S. universities because the 65,000 H-1B visas that the U.S. is allowed by Congress to issue each year run out so fast. This year, the cap on the number of H-1B visa petitions that the U.S. government will issue was hit on the first day it began accepting visa applications.

U.S. companies like Microsoft and Oracle also claim many of the H-1B workers they do hire end up seeking permanent U.S. residency, but get frustrated by the years-long wait to get their green cards, forcing many of them to return to their home countries.

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