Suspension Of H-1B Visa Will Hit IT Talent Supply Chain

Suspension of H-1B and L-1 visas by the Trump administration beyond September could impact the IT services and US technology firms.

The suspension comes at the back of rising employment in the US that has now crossed 40 million on the back of the COVID-19 outbreak. The Trump administration in an executive order signed on April 22 suspended immigration for 60 days. It stated that non-immigrant visas would be reviewed within 30 days to ensure that American workers are not impacted. An order related to this regard could be expected in the next 1-to-2 weeks, the report said.

If it is a temporary ban for 60-90 days, it will have not have a material impact since any visas approved would come under financial year starting October 2020. However, any ban into the US beyond September can impact the supply chain of talent for IT services companies, the Kotak Institutional Equities report added.

Top IT firms in the last few years have reduced their dependence on H-1B due to stringent visa regulations imposed by the recent government since 2017.

This includes increased denial rates and requests for evidence. Top IT firms such as Infosys, TCS, HCL Technologies, and Wipro have stepped by their localization efforts with more than 50% of their workforce now comprising American employees.

Among the technology firms, Google, Microsoft, Amazon, Facebook, Apple, and Intel are one of the top H-1B employers with an approval rate of more than 96 %. The report reveals that the number of approved H-1B visas has declined by more than half since 2017.