WASHINGTON: A legislation has been introduced in the US Senate on reforming the H-1B and L1 visa programmes, popular among Indians, under which th e American firms looking for skilled foreign professionals are required to make a "good faith" attempt to recruit local workers first.
Given that the skilled professionals from India are the one who account for the maximum number of H-1B and L1 visas, Indian professionals followed by those from China are likely to be hit the most if the legislation introduced by Senators Chuck Grassley and Dick Durbin is passed by the Congress and then signed into law by the President.
The bill, introduced yesterday, requires all employers who want to hire an H-1B guest worker to first make a good faith attempt to recruit a qualified American worker. Employers would be prohibited from using H-1B visa holders to displace qualified American workers.
"Our bill will put a stop to the outsourcing of American jobs and discrimination against American workers," Senator Durbin said in a statement. "The H-1B visa programme should complement the US workforce, not replace it," he argued.
The bill prohibits the practice of 'H-1B only' ads and prevents employers from hiring additional H-1B and L-1 guest workers if over 50 per cent of their employees are H-1B and L-1 visa holders, Grassley said in a statement. It gives power to the Department of Labour to investigate, audit and penalise abuse of H-1B and L1 visa employers.
However, Grassley argued the bill does not eliminate the programme or change the numerical cap of visas available to petitioning employers. "The H-1B programme was never meant to replace qualified American workers. It was meant to complement them because of a shortage of workers in specialised fields. In tough economic times like we're seeing, it's even more important that we do everything possible to see that Americans are given every consideration when applying for jobs," he said.
If there are not qualified Americans, companies can use the legal immigration programmes available, "but we must return the H-1B and L visa programmes back to their original intent," Grassley said.
"Congress created the H-1B visa programme so an employer could hire a foreign guest worker when a qualified American worker could not be found. H owever, the H-1B visa programme is plagued with fraud and abuse and is now a vehicle for outsourcing that deprives qualified American workers of their jobs," Durbin said.
He claimed that the H-1B visa programme is currently being used by some companies to outsource American jobs to foreign countries. "Under current law, an outsourcing company can use American workers to train H-1B guest-workers, fire American workers and outsource the H-1B workers to a foreign country where they will do the same job for a much lower wage. In fact, Indian Commerce Minister Kamal Nath has referred to the H-1B as 'the outsourcing visa," he said.
It was Grassley and Durbin who were mainly instrumental in the Congressional legislation early this year which stopped hiring of foreign workers by US companies receiving the federal stimulus money. As a result of this, coupled with the general economic recession, the filing of H-1B visas has dropped quite significantly.
In the first three weeks after they started receiving applications, US authorities received about 44,000 H-1B visa petitions against the Congressional mandated quota of 65,000. In previous years, they had been receiving H-1B petitions several times the number of Congressional mandated quota.
In October last year, they had released a Benefit Fraud and Compliance Assessment that highlighted rampant fraud in the H-1B programme. The report revealed more than a 20 per cent violation rate by those who use the H-1B visa programme.
"When Citizenship and Immigration Services report that there is more than a 20 per cent violation rate in the H-1B visa programme, it's pretty clear that many companies are abusing the programme and not using it as was intended. Fraud and abuse of the H-1B visa programme will not be tolerated and our bill puts companies on notice," Grassley said.
"Our legislation to reform the programme will benefit American workers, while still ensuring that US companies get the highly specialised workers they need."
Grassley alleged that fraud and abuse had become all too prevalent in the H-1B programme and thus there was need to close loopholes and enact reform.
Friday, April 24, 2009
Microsoft: First Time Drop in Revenues
Microsoft reported a drop in quarterly revenues for the first time in the 23 years since it went public.
But investors still gave the world largest software company their approval, sending Microsoft shares higher in after-market trading as its aggressive cost cutting measures preserved profitability.
The Seattle-based company said its revenues dropped 6 per cent to $13.7 billion, compared to the year-ago quarter. Profits of $3 billion represented a 32-per cent drop from the $4.4 billion it earned in the same period last year.
The company has been hit hard by a drop in consumer spending, with people delaying or canceling purchases of new computers. Sales of Microsoft's Windows operating system were down for only the second time in history, but Microsoft said it saw signs that the worst may be over.
"While market conditions remained weak during the quarter, I was pleased with the organisation's ability to offset revenue pressures with the swift implementation of cost-savings initiatives," Microsoft chief financial officer Chris Liddell said.
"We expect the weakness to continue through at least the next quarter."
But investors still gave the world largest software company their approval, sending Microsoft shares higher in after-market trading as its aggressive cost cutting measures preserved profitability.
The Seattle-based company said its revenues dropped 6 per cent to $13.7 billion, compared to the year-ago quarter. Profits of $3 billion represented a 32-per cent drop from the $4.4 billion it earned in the same period last year.
The company has been hit hard by a drop in consumer spending, with people delaying or canceling purchases of new computers. Sales of Microsoft's Windows operating system were down for only the second time in history, but Microsoft said it saw signs that the worst may be over.
"While market conditions remained weak during the quarter, I was pleased with the organisation's ability to offset revenue pressures with the swift implementation of cost-savings initiatives," Microsoft chief financial officer Chris Liddell said.
"We expect the weakness to continue through at least the next quarter."
Monday, April 13, 2009
India Accounts for 38 percent H1B Visas
WASHINGTON: As the US is having a tough time in filling up its annual quota of 65,000 H-1B work visas for highly skilled categories, an official report here has said that the Indian nationals accounted for the 38 per cent of the total H-1B visas issued by the United States last year.
India also accounts for maximum number of people entering the US on L-1 visa, which is primarily used for intra-company transferees, said the Annual Flow Report released by the Office of Immigration Statistics.
The report is based on the information gathered from the I-94 on the number and characteristics of non-immigrant admissions to the US in 2008.
The report said Indian nationals accounted for 157,726 (37.8 per cent) of the 409,619 H-1B Admissions in the US in 2008. In actual figures, this is a drop of about 3,000 as compared to 2007 when 157,613 Indian citizens were admitted to the US on H-1B visas. In 2006 the figure was 125,717.
The annual report reveals that Canada is a distant second in terms of H-1B visa admissions. In 2008 as many as 23,312 Canadian nationals were admitted to the US on this visa category, followed by Britain (19,209), Mexico (16,382) and China (13,828).
"The leading countries of citizenship for H1B admissions in 2008 were India (38 per cent), Canada (5.7 per cent), and the UK (4.7 per cent). Nationals from these three countries accounted for 48 per cent of H1B admissions," the report said.
As for the L-1 visas, it said, in 2008 leading source countries in this category were India (17 per cent), Britain (14 per cent), and Japan (9.8 per cent). The nationals of these three countries accounted for 40 per cent of L1 admissions, it said.
Of the total of 382,776 L-1 Admissions in 2008, as many as 63,156 were from India. This is almost twice the 33,414 admissions in 2006.
This is for the first time that India has topped in the L-1B visa category, which so far was occupied by Britain for the past few years.
With H-1B visas becoming tough in the last few years, Indian companies had increasingly relied on L-1 visa category for sending highly skilled workers to the US.
India also accounts for maximum number of people entering the US on L-1 visa, which is primarily used for intra-company transferees, said the Annual Flow Report released by the Office of Immigration Statistics.
The report is based on the information gathered from the I-94 on the number and characteristics of non-immigrant admissions to the US in 2008.
The report said Indian nationals accounted for 157,726 (37.8 per cent) of the 409,619 H-1B Admissions in the US in 2008. In actual figures, this is a drop of about 3,000 as compared to 2007 when 157,613 Indian citizens were admitted to the US on H-1B visas. In 2006 the figure was 125,717.
The annual report reveals that Canada is a distant second in terms of H-1B visa admissions. In 2008 as many as 23,312 Canadian nationals were admitted to the US on this visa category, followed by Britain (19,209), Mexico (16,382) and China (13,828).
"The leading countries of citizenship for H1B admissions in 2008 were India (38 per cent), Canada (5.7 per cent), and the UK (4.7 per cent). Nationals from these three countries accounted for 48 per cent of H1B admissions," the report said.
As for the L-1 visas, it said, in 2008 leading source countries in this category were India (17 per cent), Britain (14 per cent), and Japan (9.8 per cent). The nationals of these three countries accounted for 40 per cent of L1 admissions, it said.
Of the total of 382,776 L-1 Admissions in 2008, as many as 63,156 were from India. This is almost twice the 33,414 admissions in 2006.
This is for the first time that India has topped in the L-1B visa category, which so far was occupied by Britain for the past few years.
With H-1B visas becoming tough in the last few years, Indian companies had increasingly relied on L-1 visa category for sending highly skilled workers to the US.
11th April 09: Infosys Layoff - The IT giant Infosys Technologies fires 2100 employees - lays off fears confirmed
11th April 2009
The fear of layoff at Infosys is finally confirmed! Infosys Technologies the blue eyed company of Indian corporate community has finally shown the boot to 2,100 of its employees across the country.
Reportadly they indicated that they have done this after an annual performance appraisal exercise concluded mid-March. This is said by none other than Mohandas Pai, head of the company’s HR, that based on the performance, 2,100 employees had left (or asked to leave?) Infosys. The company had a total headcount of 1,03,078.
“The tolerance for non-performance has come down to zero,” Mohandas Pai, HR Head Infosys Appraisal conducted for 60,000 employees
- Bottom 3.5% of the people were either outplaced (soft jargon for laid off) or left
Normally the bottom size is 5%
- Trainees (about 45,000) were not part of this exercise.
It may be recalled and reported on in IndiaSummary.com that about 3 months Infosys had said it has put close to 5000 employees on scanner or performance watch.
What needs to be seen is that taking clue from the leader - whether other IT companies in India will follow the suite?
Sunday, April 12, 2009
2009 The Year Ahead for Indian IT
With sinking profits, eroding margins, cost-cuttings and an acquisition bid gone awry, 2008 was a year with more jeers than cheers for the country's over $50 billion IT sector, which has seen nearly a decade of uninterrupted boom.
However, as 2008 draws to a close, the sector is bracing up for a tough time ahead as the scars of global recession are showing up on the country's sunrise sector.
The sector, which has been charting a growth of over 30 per cent, had to settle for a growth rate of 20 per cent, as the global slowdown plunged the industry into unpredictable times.
In the year littered with economic disasters, the failed attempt of country's fourth largest software exporter Satyam Computer to botch up two family-promoted firms for $1.6 billion not only resulted in loss of face but also hit the reputation nurtured by the Indian IT sector over the years.
Faced with shareholder's revolt and heavy criticism over corporate governance issues, Satyam withdrew the offer within hours of making the proposal.
But within a space of 24 hours, the scrip lost over 30 per cent in India and was down 55 per cent in New York Stock Exchange trade.As a fallout, the Board size also shrank with four independent Directors resigning from the 10-Directors strong Board of the company in the wake of the fiasco.
The Satyam saga is likely to continue next year as well with the Board scheduled to meet on January 10.If Satyam made it to the headlines for a failed deal, it was HCL Technologies, the country's fifth largest software exporter next to Satyam that made the country proud by inking the largest takeover deal in the software space overseas.
HCL piped rival country's second largest IT giant Infosys to bag UK-based SAP consulting firm Axon for $658 million. While Infosys had made 600 pence per share offer for Axon, HCL made a counter bid of 650 pence a share to acquire the UK-based firm.
The year was also some significant M&As on the IT front, such as the $13.9-billion acquisition of Electronic Data Services by HP. Back home, Wipro acquired Citi Technology Services, Citigroup's IT arm in India, in an all-cash $127 million deal.
Earlier, TCS had bought out Citi's captive BPO arm Citigroup Global Services for about $505 million, which reiterates the strength of the Indian IT story. Another reason that will give the software services sector a reason to rejoice is the IT Amendment Bill.
The Lok Sabha passed the Information Technology (Amendment) Bill 2006 this month, which gives the government the power to tackle data theft. The bill might act as a shot in the arm for the BPO firms for whom data security is of utmost importance.
The Bill has provisions to deal with new forms of cyber crimes like publicising sexually explicit material in electronic form, video voyeurism and breach of confidentiality, leakage of data by intermediary and e-commerce frauds, among others.The US is the world's largest technology market and accounts for between 50 per cent and 60 per cent of the revenues of the top Indian firms. Since September, however, the economic situation in the US and the rest of the world has worsened.
Country's software lobby group Nasscom had estimated that India's software and back-office services industry would grow by 21-24 per cent in the 12 months to March, but its president Som Mittal said recently that this number could be revised downward.
With no signs of an early revival, all the IT biggies such as TCS, Infosys, Wipro and Satyam have revised their revenue guidance downwards.The currency volatility has also compounded the woes of the Indian IT sector.
If a rising rupee in the last fiscal had dented export earnings, the steady rise of the US dollar against the rupee, British pound and Euro during the second quarter (July-September) impacted revenue realisation in dollar terms since 30 per cent of the billing is done in these currencies.The sector also experienced slowdown in hiring.
Already, under pressure to cut cost, most of the IT biggies had to freeze their hiring in the year. Moreover, the joining dates of the new recruits were also postponed, ringing the alarm bells in the job market. The top five IT companies posted a 36 per cent decline in their rate of manpower addition in the last quarter.
As for hiring by BPOs -- for long looked upon as poor the cousins of information technology companies -- also faced the heat.
However, BPOs remained a bit sanguine, as Nasscom's figures indicate that the BPO sector recorded revenue growth of 31.6 per cent whereas IT companies grew at 28 per cent.In 2009, as the new administration led by Barack Obama takes a look at the outsourcing story vis-a-vis India, it is the efficiency and resilience of the IT sector which can help it sail through the troubled waters.
However, as 2008 draws to a close, the sector is bracing up for a tough time ahead as the scars of global recession are showing up on the country's sunrise sector.
The sector, which has been charting a growth of over 30 per cent, had to settle for a growth rate of 20 per cent, as the global slowdown plunged the industry into unpredictable times.
In the year littered with economic disasters, the failed attempt of country's fourth largest software exporter Satyam Computer to botch up two family-promoted firms for $1.6 billion not only resulted in loss of face but also hit the reputation nurtured by the Indian IT sector over the years.
Faced with shareholder's revolt and heavy criticism over corporate governance issues, Satyam withdrew the offer within hours of making the proposal.
But within a space of 24 hours, the scrip lost over 30 per cent in India and was down 55 per cent in New York Stock Exchange trade.As a fallout, the Board size also shrank with four independent Directors resigning from the 10-Directors strong Board of the company in the wake of the fiasco.
The Satyam saga is likely to continue next year as well with the Board scheduled to meet on January 10.If Satyam made it to the headlines for a failed deal, it was HCL Technologies, the country's fifth largest software exporter next to Satyam that made the country proud by inking the largest takeover deal in the software space overseas.
HCL piped rival country's second largest IT giant Infosys to bag UK-based SAP consulting firm Axon for $658 million. While Infosys had made 600 pence per share offer for Axon, HCL made a counter bid of 650 pence a share to acquire the UK-based firm.
The year was also some significant M&As on the IT front, such as the $13.9-billion acquisition of Electronic Data Services by HP. Back home, Wipro acquired Citi Technology Services, Citigroup's IT arm in India, in an all-cash $127 million deal.
Earlier, TCS had bought out Citi's captive BPO arm Citigroup Global Services for about $505 million, which reiterates the strength of the Indian IT story. Another reason that will give the software services sector a reason to rejoice is the IT Amendment Bill.
The Lok Sabha passed the Information Technology (Amendment) Bill 2006 this month, which gives the government the power to tackle data theft. The bill might act as a shot in the arm for the BPO firms for whom data security is of utmost importance.
The Bill has provisions to deal with new forms of cyber crimes like publicising sexually explicit material in electronic form, video voyeurism and breach of confidentiality, leakage of data by intermediary and e-commerce frauds, among others.The US is the world's largest technology market and accounts for between 50 per cent and 60 per cent of the revenues of the top Indian firms. Since September, however, the economic situation in the US and the rest of the world has worsened.
Country's software lobby group Nasscom had estimated that India's software and back-office services industry would grow by 21-24 per cent in the 12 months to March, but its president Som Mittal said recently that this number could be revised downward.
With no signs of an early revival, all the IT biggies such as TCS, Infosys, Wipro and Satyam have revised their revenue guidance downwards.The currency volatility has also compounded the woes of the Indian IT sector.
If a rising rupee in the last fiscal had dented export earnings, the steady rise of the US dollar against the rupee, British pound and Euro during the second quarter (July-September) impacted revenue realisation in dollar terms since 30 per cent of the billing is done in these currencies.The sector also experienced slowdown in hiring.
Already, under pressure to cut cost, most of the IT biggies had to freeze their hiring in the year. Moreover, the joining dates of the new recruits were also postponed, ringing the alarm bells in the job market. The top five IT companies posted a 36 per cent decline in their rate of manpower addition in the last quarter.
As for hiring by BPOs -- for long looked upon as poor the cousins of information technology companies -- also faced the heat.
However, BPOs remained a bit sanguine, as Nasscom's figures indicate that the BPO sector recorded revenue growth of 31.6 per cent whereas IT companies grew at 28 per cent.In 2009, as the new administration led by Barack Obama takes a look at the outsourcing story vis-a-vis India, it is the efficiency and resilience of the IT sector which can help it sail through the troubled waters.
Microsoft Corp Senator asks to retain US Jobs
According to Reuters: “A U.S. senator has asked Microsoft Corp about its plans to slash up to 5,000 jobs, urging the world’s biggest software company to preserve the jobs of Americans ahead of foreigners working on visas.”
“The letter asked Microsoft Chief Executive Steve Ballmer to provide a breakdown of the jobs to be eliminated, and how many of those are individuals with H-1B visas and how many are Americans. Grassley also wants to know what the breakdown will be when the layoffs are complete.”
“I am concerned that Microsoft will be retaining foreign guest workers rather than similarly qualified American employees when it implements its layoff plan [...] Microsoft has a moral obligation to protect these American workers by putting them first during these difficult economic times”, said Sen. Charles Grassley, an Iowa Republican.
“The letter asked Microsoft Chief Executive Steve Ballmer to provide a breakdown of the jobs to be eliminated, and how many of those are individuals with H-1B visas and how many are Americans. Grassley also wants to know what the breakdown will be when the layoffs are complete.”
“I am concerned that Microsoft will be retaining foreign guest workers rather than similarly qualified American employees when it implements its layoff plan [...] Microsoft has a moral obligation to protect these American workers by putting them first during these difficult economic times”, said Sen. Charles Grassley, an Iowa Republican.
HP Pay Cut
Hewlett-Packard workers fired up their PCs Friday morning to find a long memo from Mark Hurd explaining why he was imposing wide-ranging pay cuts in an effort to prevent further job losses at the computer vendor.
HP CEO Hurd told employees yesterday that no more jobs would be axed for the foreseeable future. Instead he applied salary reductions across the board.
Executive council members will have base pay trimmed by 15 per cent; other execs will see base pay reduced by 10 per cent; “exempt employees” base salary takes a five per cent hit; and “non-exempt employees” base pay drops 2.5 per cent.
Source http://www.theregister.co.uk/2009/02/19/hp_pay_cuts/
HP CEO Hurd told employees yesterday that no more jobs would be axed for the foreseeable future. Instead he applied salary reductions across the board.
Executive council members will have base pay trimmed by 15 per cent; other execs will see base pay reduced by 10 per cent; “exempt employees” base salary takes a five per cent hit; and “non-exempt employees” base pay drops 2.5 per cent.
Source http://www.theregister.co.uk/2009/02/19/hp_pay_cuts/
Sapient Lays off 8% Employees
Sapient Corp. became the latest e-consultant forced into major cutbacks by the economic downturn, announcing layoffs around 8 percent of its work force in India (Gurgaon) on Feb 12 and warning it won't make its expected first quarter profit.
Earleir Sapient fired 160 people in July 2008 without notice. Firings were underway with over 200 more people in PIP & bench was already fired on november 2008. On an average sapient fire 1 in every 3 employee.
Sapient said it has laid off employees as part of an effort to cut costs amid a continued slump in market demand and the economy.
Under the move, the Sapient firm is slated to cut professionals and administrative staff. The restructuring also is expected to include office consolidation, but the company said it will continue to work in all cities where it now has offices.
During this quarter , Sapient expects to take a restructuring charge of employee severance and office consolidation costs.
Source:http://toostep.com/trends/sapient-layoffs-india
Earleir Sapient fired 160 people in July 2008 without notice. Firings were underway with over 200 more people in PIP & bench was already fired on november 2008. On an average sapient fire 1 in every 3 employee.
Sapient said it has laid off employees as part of an effort to cut costs amid a continued slump in market demand and the economy.
Under the move, the Sapient firm is slated to cut professionals and administrative staff. The restructuring also is expected to include office consolidation, but the company said it will continue to work in all cities where it now has offices.
During this quarter , Sapient expects to take a restructuring charge of employee severance and office consolidation costs.
Source:http://toostep.com/trends/sapient-layoffs-india
Sunday, April 5, 2009
HCL Technologies Salary Increments Frozen, Bonus Cut
http://www.business-standard.com/india/news/hcl-goes-for-salary-freeze-bonus-cutbacks/353832/
IT major HCL Technologies has decided to mitigate pressures on operating margins by freezing salary increments through 2009-10.
The company has told its employees that there won’t be wage hikes for the financial year ending July 31, 2009, due to tight demand in the US and Europe, declining volumes, and the need to further tighten expenses across business divisions.
In a harsher step, the company has slashed retainer bonus, which averages 10 per cent of an employee’s salary, from April 1. Travel allowance has been sharply reduced, if not curbed, in most cases. “HCL is discouraging travel requests, except in exceptional cases related to onsite employees. The option for an employee to use his travel allowance has been minimised,” said an HCL employee.
An HCL spokesperson said the recent communication with employees was part of a routine process under which the leadership of the company reached out to employees across the organisation to take stock of the current business environment, changing customer requirements and to together arrive at a comprehensive strategy.
“With increased focus on delivery excellence and operational efficiency, the strategy will enable the organisation to find opportunities in the current environment and carry forward the growth momentum,” said the spokesperson.
The company is also said to be looking at suspending matching contributions to employee retirement plans. Onsite allowances have also been slashed, though the exact quantum in this case is not clear.
Chief Executive Vineet Nayar is known to have met employees of the Chennai office recently, where these cost-cutting measures were spelt out. It is learnt that while the company has not gone for salary cuts at this point in time, a 25 per cent salary cut for employees on the bench has been considered. “Salary cuts were considered, but were not carried out. Instead, employees are now being charged for frills like coffee and refreshments,” said a source.
In January, HCL had said that it would reduce about 280 jobs, or 8 per cent of its global workforce, and implement other cost-cutting measures. The company is learnt to have laid off about 450 people from its British Telecom practice. Redeploying bench resources, which constitute roughly 20 per cent of HCL’s workforce, continues to be a challenging prospect for the company.
Many employees on the bench have been given up to two chances for redeployment on a new project, failing which they have been given the option to leave, sources say, adding that each fresher is being given up to two client interviews.
Besides shrinking IT spends in its key markets of North America and Europe, HCL’s acquisitions of Liberata Financial Services and Control Point Solutions ($20.8 million) last year are believed to have affected its EBITDA margins — which grew 1.1 per cent to 22.5 per cent on a year-on-year basis during the second quarter ending December 31 last year. To add to HCL’s woes, its forex losses owing to the depreciation of the rupee in Q3 of the 2009 fiscal expanded to $207 million from $156 million a year earlier.
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