Drop in some firms’ H-1Bs due to cloud, report says

Companies commonly under fire for abusing the H-1B program received significantly fewer of the coveted work visas in fiscal 2016 compared to a year earlier, according to a new report. Experts attribute the drop to the cloud and artificial intelligence.

The H-1B visa, which allows highly-skilled foreigners to live and work in the U.S. at a sponsoring company, has been a constant point of contention between Silicon Valley and Washington. While tech companies rely on the visas to staff engineering positions, others say they are used by companies to squeeze out American jobs.

Critics often point to the high number of visas going to Indian outsourcing firms —such as Infosys, Tata Consultancy Services and Wipro — as a reason to curb the H-1B visa program. While these Indian companies still received the most H-1B visas for initial employment in 2016, a report released Monday by the National Foundation for American Policy found that those numbers are sharply declining.

Stuart Anderson, author of the report and executive director of the nonpartisan think tank, said the conclusions weaken the Trump administration’s argument for wanting to limit the number of H-1B visas issued.

According to the report, seven Indian outsourcing companies collectively received 37 percent fewer H-1B visas in fiscal 2016 than in 2015. Anderson attributes the drop to a global trend of corporate clients demanding digital services that require fewer workers and more advanced, cloud-based technology.

The study was based on an analysis of government data provided by the Citizenship and Immigration Services.

Only 85,000 H-1B visas are available to for-profit companies every year, and the number of applications has far exceeded that number in recent years. Daniel Costa, director of immigration law and policy research at the Economic Policy Institute, noted that companies are increasingly using other types of work visas — such as the L-1— to bring in foreign talent.

The report notes that the drop in the number of approved H-1B applications occurred before the election of Donald Trump. A few months after he took office, both Infosys and Tata announced job-creation measures for U.S. workers.

In an April call with Wall Street analysts to discuss fourth-quarter earnings, Infosys CEO Vishal Sikka said the company will expand its local hiring to “mitigate any potential risks from visa regulations in the U.S.”

Meanwhile, Bay Area tech companies including Intel, Google and Apple received significantly more H-1Bs over the past year, according to the study. H-1Bs are commonly used by tech firms to attract talent from around the world. The sector has long lobbied for more visas, saying that the demand for skilled labor far outweighs the supply.

A Chronicle analysis found that large American tech companies tend to pay certain employees holding H-1B visas significantly more than the minimum salary required, in contrast to some Indian outsourcing companies.

The differing distribution of H-1Bs among companies is not the only change the visa program has recently experienced. In addition, the number of applications for the visa program has dropped for fiscal 2018. It’s the first dip in applications the U.S. has experienced in years. Experts said the drop partly shows that Trump’s “America’s First rhetoric” is working — as well as a change in the tactics of the Indian outsourcing companies.

Trisha Thadani is a San Francisco Chronicle staff writer. Email: tthadani@sfchronicle.com Twitter: @TrishaThadani

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