How IBM, Microsoft, and Oracle Use H-1B Visa Subcontracting

The H-1B visa program is polarizing. Some think major tech companies abuse it; but for years, it was hard to see the extent to which some of these firms leveraged workers on the visa. Now, thanks to a new dataset, we have a better idea of how some of the largest enterprise companies (specifically, IBM, Microsoft, and Oracle) fully utilize the H-1B program.

The data comes via a U.S. Department of Labor (DOL) dataset of H-1B visa applications for FY2019, which is so massive we’ll caution you against downloading it yourself (seriously, it will melt down your laptop). From there, we parsed the companies using the H-1B visa program as “secondary entities,” which is a designation given to companies that subcontract from other firms; the U.S. Department of Labor uses it to track where H-1B candidates actually end up working. Many tech companies source foreign talent via agencies; that’s why states such as Texas and California, where many of the biggest sourcing firms are based, have the heaviest H-1B visa activity.

Sometimes those sourcing firms are listed as primary employers, while the tech firms actually putting foreign employees to work are listed as the aforementioned “secondary entities.” Tech firms not only employ H-1B visa workers directly; they also subcontract them out in significant numbers. The Trump administration recently requested that consulting firms and contractors reveal far more about their subcontracting clients, so much of this data is new to the public.

(Specifically, the DOL’s Form ETA-9035 & 9035E (PDF) asks that employers cite whether workers “will be placed with a secondary entity at this place of employment.” If the answer is “yes,” the employer must provide the legal business name of the “secondary entity,” along with the wage rate it pays nonimmigrant workers, and the prevailing wage rate. Those companies that contract workers out to many clients will need to fill out forms for each third-party worksite. In addition to H-1B applicants, the new form applies to those filing H-1B1 and E-3 petitions.)

Indeed, tech firms can get creative in how they list their H-1B applicants. One example: smaller companies listed as having an office on these major firms’ campuses. We chose to exclude those small companies from this list, as it wasn’t clear if those smaller companies were simply placing their direct H-1B hire in that office, or if that visa-holder was actually subcontracting for the larger tech firm. In some instances, the small firm may actually be a shell corporation or offshoot of the big tech company.

Similarly, some H-1B hires are listed as “dual purpose.” IBM has several hires that are listed as working for the company proper as well as the “State of Washington” or various government agencies. IBM also narrowly places their H-1B hires in divisions like Watson or “cloud.” We included these candidates in our results below.

As you see, Microsoft is the biggest of the subcontracting bunch, with 545 H-1B visa applicants via sourcing firms. IBM ranks second with 388. Oracle is a distant third place, with 12 visa contractors. (Also, check out how much H-1B software engineers at Microsoft, Apple, and Google actually get paid!)

CitizenPath co-founder Russ Leimer points out that the government has started requesting data showing H-1B hires have specialized skills, as well as proof the positions they were hired for cannot be staffed by domestic technologists. In theory, this could lower the number of H-1B applicants over time; in a separate analysis of this dataset, we found more generic titles such as “Software Engineer” and “Software Developer” were the most widely used for H-1B visa hires. It’s hard to imagine these firms can’t find 45,000 developers or engineers stateside.

48 Responses to “How IBM, Microsoft, and Oracle Use H-1B Visa Subcontracting”

  1. Maha Guru

    IBM is a well-known H-1B user. In an article by Mother Jones, it clearly shows how American tech workers were replaced by H-1B just for cost not for any definitive better skills (in fact, the H-1B were clearly inferior). The same was the case in Disney. The H-1B system needs major reform but our useless Congress is instead pushing for a bill that makes all the H-1B from India get faster green cards!!! No relief for American tech. Needless to say HR1044 (The Congress version of the bill) was headed by an immigration attorney (former) Zoe Lofgren of CA. Enough said.

  2. Bill Porsche

    I have managed IT programs and projects at major banking institutions including CITI , JP Morgan, Bank of NY and others. The H1B hires are NOT highly skilled , in fact many are recent college graduates with no experience at all. In most case resumes were created to claim experience that did not exist. Technical skills are exaggerated and sometime just made up. As a program/ Project manager I interviewed many and questioned why they were hired. I always got the same answer ; they are very cheap. This is all about CHEAP LABOR. Places like CITI claim it is in the interest of diversity. If you Raised the price ,the CITI diversity would go out the door.

  3. Steven Bowen

    Just found out my former co-worker at an American aerospace firm is losing his Tech Writer position to an H1B. He has to train them for almost year, if he doesnt cooperate, he will be fired and they contest any unemployment benefits and he wont get severance. This is what happened to me at Honeywell in Arizona.

    I have been responding to these H1B stories and talking about it to friends for a while but he never thought it would happen to him.

    • Sorella

      If he has anything in writing to show this, or can trick them into giving him something, and has a diary showing the timeline, he might try asking an attorney about “constructive discharge.” Meanwhile, he can try training them wrong or incompletely (as much as he can). We have got to stop handing over our hard-won skills to them.

  4. Couldn’t agree with the prior comments more. I have been working in software development for nearly 15 years. In that time I have witnessed many fellow American coworkers of all ethnic groups and backgrounds (IT support, software developers, sourcing, purchasing, human resourves etc. ) being let go only to have their services outsourced or replaced with H1B contractors. I can tell you from first hand experience that the people they were replaced with were no more skilled than they were and in most cases were much less capable than those who were replaced. This does not even touch on other issues such as language barriers, work ethics, attitude etc. Plain and simple H1Bs are used and abused as cheap labor PERIOD. The current claims of not being able to find skilled Americans in these areas is a load of crap… But give it a few more decades of American tech workers being turned down and shutout of the market and we really will see a shortage.

    • Ramon Ascuidiaz

      Corporations have very clear priorities. If they don’t get cheap labor here, they are going to move the jobs abroad. The rate at which jobs have moved out this year is alarming. Every job moved is in effect 2.2 jobs, at a minimum, considering dependent jobs. The larger issue though is, blocking H1b visa leads to even more siphoning off jobs. I know a case where a project manager was forced to move back to Philippines, and they allowed him work remotely. In an year, the entire team of twenty odd people under him in the USA was replaced by a team in Philippines. The effect will be visible once the economy slows down. I know another man who could not get a Visa processed to move to India, eventually started working from India as a vendor. They scaled up to 60+ people in less than an year. The American company has no software development activity in America now.

  5. Oracularman

    These companies and their value poor , money hungry CXOs are so shameless that instead of introducing multiple shifts for employees where experienced individuals could manage as Managers , an offshore team in India from here in the US, they decided to enrich their pockets and stocks by subcontracting to H1 body shops where billable bodies are readily available. To the CEOs, if you want an assembly line, have multiple shifts for experienced employees , make them managers and get the job done. Don’t complain to the Congress about lack of competitiveness to China. This can be done and I can show you how. Email me.

  6. Nate – it would be great if you compiled the employment-based green card data to show the prevailing wage levels these visa holders are being paid. The wage rules for H-1B and green card sponsorship are broken down into wage Levels I, II, III and IV, with Level III being the median. The last I checked, for software developers, the most common type of foreign worker on H-1B, the green card data show the following percentages of foreign workers at Levels I or II, making below-median wages: Amazon 91%; Facebook 91%; and Google 96%. All three of these firms are paying the vast majority of their foreign workers wages below the median for the given region.

  7. Hajuna matete

    Business is for profit and whatever legal way a CXO can achieve higher profits he will. It’s not a charity. The main aim and sole purpose of a business is to make money. If you manage to stop all H1B then these businesses will move as they have moved in the past. Look at manufacturing/auto etc. Stop whining and start learning new skills so you can be competitive in the labour market. Unless you are socialist and want the government to support you.

      • Corporate Welfare has never been an issue for conservatives. The hippocracy is not lost on most people. Heck, oil companies are still getting numerous handouts, subsidies, and backdoor legislation to improve their already bloated profit margins. And they aren’t the only one to benefit from these policies. {Don’t get me wrong, Democrats are just as bad in their own way on many issues}.
        All these American companies that people like to anthropomorphize, and think of as patriotic, are nothing of the sort. The wealthy people who own/run them will sell out this country in a heartbeat for a little better quarterly statement, or a slight rise in stock price. They already have. China would still be at a 1950s technological level, and in no position to contest western influence around the world if western companies hadn’t sold us out with massive technology transfers so China can make cheap widgets for them.

    • Use crappy programmers, designers, and PMs who have limited skills and can barely communicate with each other–get crappy, fatally flawed, and often backdoored end results. Ask Boeing with an unfixable and fatal program in the 737 MAX.

    • Not against real capitalism but inflating a market with cheap labor that destroys American jobs of those that actually would work and learn new skills as you claim is not real capitalism. Free Market Capitalism doesn’t have GOV and special interest groups creating a no win situation for American Workers. College Costs and Certs cost a lot of money for the IT field and are not one time things. Certifications are a racket now as I must be re-certified every 3 years and if you compare the test before with the test now, only a 3rd has changed and they added more acronyms.
      I am tired of hearing Americans learn new skills. Especially when skills are not the issue but cheap labor is. There used to be a reason that a limited amount of legal migrants and even work visas were issued.

      I have a free market idea If you want to send all the jobs overseas then fine. NO tax breaks and no subsidies from Daddy GOV and the american Tax payer. Compete fairly and then we will see who wins. Also give the American workers the same benefit as the Indian Government and our GOV does to these “minorities”.
      No special hiring privileges for foreigners and no government intervention and lets see if as if by a miracle the Highly qualified and experienced American IT guys all of a sudden seems to be less unemployed or under employed.

    • Paul Miller

      Hajuna says “Stop whining and start learning new skills so you can be competitive in the labour market” — what a laughing riot! It is NOT IN ANY WAY a “skills” competition issue. In fact, most of these H1B workers are technically inept and useless, And even at 1/10 the salary of a US worker is still not a good value proposition. They don’t work, and don’t produce. They often can’t answer questions about the systems they allegedly produce and support. The issue is one of lies told to stupid managers, and some twisted sense of affirmative action. Companies aren’t getting their moneys worth, and they’ll find that out only once they’ve driven out all the American tech workers.

    • Oracle use to be a great database. Now it’s junk, and has lots of issues. They told Comcast “We don’t know what the problem is, and we won’t know how to fix it in two years”. The outsourcing explains why the decrease in quality.

  8. If you need to have lower product price you must decrease your expenses and costs – This is what all those companies are doing. Otherwise, Americans will pay more money for american’s products (so this is 2 side problem).
    PS: America is immigrant’s country. Don’t you think?

  9. Use crappy programmers, designers, and PMs who have limited skills and can barely communicate with each other–get crappy, fatally flawed, and often backdoored end results. Ask Boeing with an unfixable and fatal program in the 737 MAX.

  10. It is unfortunate that IT departments do not have any diversity left. It looks like an Indian invasion. Tech jobs hiring process favor candidates from Indian origin to strengthen their position inthe company and it is discriminatory against other races. In addition our jobs are outsourced. Deloitte has 80K workers in India. Come on when we are going to bring these jobs back. This program has to be reviewed. When the green card process supports country based quota then why can’t H1Bs ? There are lot of talented resources in other countries. It will keep a diversity which is a strength for our country.

  11. Corporations amass great wealth and power (power over, and infiltration of, government regulatory agencies and more) to the point where they can create de facto monopolies. Regulation and the courts are used as a barrier to entry into markets controlled by the corporations; so small competitors are crushed or acquired.
    At some point, the corporations become the only money-pumps that one can tap into for a career in the tech industry. To actually say that a corporation is “for profit” as an excuse for their actions… is a subterfuge or pure ignorance. I am for free enterprise, but this is in no way a free enterprise system any more.
    This H1B abuse game is just one more method to depress live-able wages, gorge on ill-gotten profits, and destroy the future of our children. I will not stand for it; you should not stand for it either. Create small businesses and stand and fight. Do no business with corporate evil (or at least minimize it) …the government is not going to do your work for you; they are not on your side (although some positive steps have been made by President Trump). Anti-corporation is not socialist; on the contrary, it is pro-freedom and pro free-market.

  12. It great to see that the H1B visa is finally getting scrutiny. I have worked in Silicon Valley for many years and met many folks that were here on an H1B visas. They were good, intelligent, hardworking men and women that did great jobs. But the issue is not the individuals, but the employment system that is basically indentured servitude. They have to obey the management whims, often have to work 60 to 80 hours a week, and can never complain because there is the constant threat of being sent back home. They slave in silence as they dream the American dream that could be taken away anytime.

    I appreciate the goal of the big tech companies to have cheap dedicated labor to build their products. But there are lots of American workers that could do the same jobs, but they would not work under these conditions that recall the cotton farmers of the Deep South

    Two simple suggestions to solve this issue: The minimum salary should be $200,000 and these employees should also be protected by the Fair Labor Standards that would require time and half after 40 hours a week. If these workers are truly so valuable, then tech companies should be willing comply. Otherwise there are plenty of skilled Americans that could do the same work for less

    So if the tech companies are really honest in how essential these folks are, then they should be willing to pay a higher price for their expertise. Otherwise there are plenty of skilled Americans workers who could do the same job.

  13. So what is the big deal with sub-contracting? A quick search on the iCert site shows there have been almost 1000 LCAs submissions for H1b etc, by Oracle from Jan 1 2019 to today. Subcontracting a dozen or so is not so significant.

  14. then whats the use of getting green card in the first place with legally? I may as well be a H1B visa holder! thought this country appreciates those who actually is a hard worker with skills/education and follow the rules to obtain legal residency…. apparently i was wrong

    • Absolutely! Without a job, without income to raise our kids, we can only try to survive! As an “immigrated” computer science professional myself from decades ago, with all top educations and very up-to-date working experiences — thanks for the on-and-off contract projects at those big companies — I know all too well that the skill issue is not the real reason. You just can’t imagine how much I admired my h1b co-contractors who felt so secure in their relatively stable jobs while I was so scared to receive a phone call from the vendor company informing me the contract was terminated — out of no fault of my own! Or, the only fault is that the h1b visa co-contractors can now take over my work.
      Some big companies, for example Amazon, let their recruiters (they are contractors themselves) state that they are hiring at ALL LEVELS, therefore I accepted the job application invitations but it turned out I was wasting my time.

  15. Paul Richard

    I worked in IT for over 47 years with a variety of technologies and roles. The extent of this H1-B abuse is far reaching. I know MANY former IT workers who cannot get jobs and have been unemployed, in some cases, for years. Others could never get back into the IT profession.

    Wages have stagnated in the IT industry since approx. 2000. Some of the other aspects of this invasion are headhunters are now from the outsourcing native countries and they prefer to hire their own countrymen. Also, when various levels of management are from the outsourcing native country, career opportunities, etc. dry up for U.S. IT workers.

  16. Tom Woodward

    If you look at a percentage of their total workforce IBM employees a significantly larger percentage of H1Bs the domestic workforce. IBM has also offloaded a significant portion of their portfolio, even though they remain the sole sales channel of those products to firms whose workforces that are mostly H1B and offshore workers.

  17. Investigate Hyundai Autoever America who have rampant abuse of H1B workers in IT. They hire Cognizant workers and others but refuse to hire American workers with better tech skills. Amazon is also doing the same. They don’t even call these American IT workers for an interview!

  18. The abuse of H1B visa program is also hurting the true good tech talents themselves! And if this abusive practice continues for another two decades, even if they became American citizens, they could also ended up jobless as we are currently.

  19. Steven Bowen

    Half of all millenialls are living at home, a third are saying their college education wasnt worth it. What changed for this generation? Starting with dotcom bubble burst and after Sept 11, companies began the massive H1B visa import and major outsouring. Companies took advantage the 2009 housing collapse and again accellerated their outsourcing. CEOs use the chaotic events to make their moves. This is why most people never have felt that there was a total recovery from the last recession. And now the young people are hitting the market only to find there arent very many options out there. They are told by media that if they even discuss that possiblity that foreigners have taken options from them then they are racist hillbilies. They dont even get a chance to have the discussion.