India's IT giants like Tata Consultancy Services, Infosys, Wipro are likely to revamp their delivery models (with more emphasis on off-site work culture) and cut down on H1-B applications after US President Donald Trump announced his plan to temporarily halt immigration and work towards increasing employment opportunities for US locals, industry analysts say.
Although Trump's call may not be directly related to non-immigration and H-1B visas, his stress on the need to save jobs for Americans has raised concerns of layoffs and pay cuts among Indian techies in the US.
There are currently 600000 Indians who hold H-1B visas in the US and many are in line for renewal/ extension of these visas, which was finally approved by the US Citizenship and Immigration Services (USCIS) last week.
The H-1B visa holders who were laid off were supposed to find work within 60 days or leave the country, as per earlier guidelines. Over the last few years due to stricter visa regimes, the H-1B visa rejection rates have soared. 30% of these visa applications were rejected in 2019 alone. The COVID pandemic is likely to increase the rejection rate even higher to 50% this year.
India's IT industry body Nasscom maintained that it is awaiting more clarification from the Executive Order that Trump referred to.
Analysts predict that India's top IT services firms including TCS, Infosys may go for fewer H-1B visa filings this year and there could be an increasing trend of local hirings in the US by Desi firms.
"We have seen the trend of many Indian companies hiring locally in the US for the last few years due to tougher visa modalities, which will only increase from now onwards. On the other hand, a total closure of boundaries will be no solution as the employers are always on the lookout for those with advanced skillsets. Hence for the Indian techies to survive this tide, revamping their skills will prove extremely important," Sanchit Vir Gogia, Chief Analyst and CEO, Greyhound Research said.
Trump's recent assertions, however, may prompt many companies to reshape their delivery models to more off-site work and also endanger the jobs of those who were hired by local US firms.
"A percentage of H-1B visa holders in the US end up being hired by silicon valley startups who are already threatened by the current pandemic and with stricter regulations, their jobs are at stake. Also, we have seen many IT services companies successfully implementing the off-site work culture (work from home) during lockdown which may become a sustained exercise and hence we will see fewer H-1B visa applications from IT majors in the US that also reduces travel burns,” Pareekh Jain,Founder and Lead Analyst, EIIRTRend and Pareekh Consulting said.