Impact of H1B Visa Policy and Layoff in IT Companies

Many IT firms have decided to layoff non performing employees in the recent times. Recently Cognizant has decided to fire 6-7,000 of employees who were redundant. The reason is not one. Recently, the US government has increased the minimum salary for a H1B visa employee to $130, 000 which has forced the India based IT companies to bring their employees back.

Reasons for Layoff:

The Brexit and Trump’s policy on jobs and visas have created hard situations for global companies. Cisco has decided to slash up 14,000 jobs by 2017 as its part of appraisal. Microsoft has too decided to follow the same trend by slashing up jobs of 2850 employees. IBM too has announced to fire 5000 of its employees.

Most of these companies cited cloud computing, digitization and automation as the reason behind these major layoffs. In order to invest in these ventures most companies have followed major layoffs.

The rise in technology and the lack of innovation, start-ups, research and entrepreneurship has remained the major reason for unemployment.

Growing technology is cutting jobs from labors. Lack of skilled labor is also a major reason for unemployment. Talented professionals find it easy to leave India as they get better opportunities in foreign countries but the rest of the majority is still struggling for reputed jobs. IT companies in India are the major source of employment for IT professionals in India. Most of these IT companies do send their employees to United States and other foreign countries.

United State’s tough stand on H1B visa has already started impacting on Indian IT companies. Stocks of major IT companies in India are already witnessing free fall. United States offers 65,000 visas every year out of which majority of the visas is acquired by Indians. US’s tough stand may impact job opportunities for young professionals who get employed through H1B visa.

Situation of Indian IT Companies:

Many IT firms in India have MoUs signed with Multinational IT firms under which they outsource their employees under H1B visa. As the US government has increased the minimum wage from $60,000 to $130,000, Indian IT professionals and IT companies are feeling the heat.

Indian professionals were the best for MNCs as they would work on less pay but with the new policy, MNCs are finding it harder to manage Indian employees. The government needs to intervene and create suitable atmosphere for these highly trained professionals as someone’s loss can be someone’s gain.