BENGALURU: The latest executive order signed by US president Donald Trump directing the federal agencies to stop hiring H-1B visa holders may block the move of many IT bigwigs like IBM, Dell, Hewlett Packard, Accenture, Deloitte to outsource jobs to other countries.
On Monday, Trump said that the new executive order will focus on saving jobs for Americans and prevent outsourcing of work to foreign countries in the pursuit of cheap labour.
The new Executive Order comes nearly a month after the Trump administration banned fresh H-1B visas till the year-end after the Coronavirus pandemic created a massive unemployment crisis in the country. More than 70 percent of the H-1B visa holders are Indian professionals, one of the participants in the meeting chaired by Trump said.
According to the US General Services Administration report, tech giant, IBM, and consulting firms Deloitte and Accenture figured among the top 100 contractors of the US federal agencies in FY18.
A Bloomberg report stated that the allocation of contracts to various companies by US federal agencies was billed at $1.4 trillion in FY19 and companies like Dell, Accenture featured among the top 10 IT contractors of the US government.
As per the fresh order, the federal departments/agencies will have to conduct an internal audit and review their offshore services as well as temporary foreign labour (H-1B, L-1) for contracts that were cleared in FY 2018 and 2019 and issue a report within 120 days to the Director of the Office of Management and Budget.
The report besides analysing the compliance with earlier executive orders and statutory requirements will also look at the impact on US workers, the US economy, national security, and the efficiency of Federal procurement.
The announcement came after a federal agency Tennessee Valley Authority (TVA) said that it will shift 20 per cent of its technology jobs to companies based in foreign countries. While signing the order, Trump said that he has replaced the existing CEO of TVA as the decision could easily displace 200 highly-skilled tech American workers based in Tennessee.
The Department of Labour has been asked to finalise guidelines to prevent H-1B employers from moving H-1B workers to other employer job sites and displace American workers.
Meanwhile, the Indian IT industry body, Nasscom has criticised the move saying the decision "appears to have been made on misperceptions, and misinformation".
"Part of the Executive Order focuses on federal contracting, and part of the Executive Order focuses on the H-1B visa program in general. Both elements of the Executive Order mandate reviews, reports, and development of policy and practice and recommendations rather than mandating any immediate changes. The order is particularly coming at a time when there is a huge shortage of STEM skills in the US that workers on short-term non-immigrant visas like H-1B and L-1 help bridge. The unemployment rate for computer occupations (those most common amongst H-1B visa holders) declined from 3% in Jan-2020 to 2.5% in May-2020, while the unemployment rate for all other occupations grew from 4.1% in Jan-2020 to 13.5% in May-2020. Further, in the 30-day period ending 13th May 2020, there were over 625,000 active job vacancy postings advertised online for jobs in common computer occupations, including those most common to H-1B visa holders," Nasscom stated.