Trump’s H-1B Ban: Boost for Domestic Technologists, or Outsourcing?

Will President Trump’s temporary ban on H-1B visas boost domestic hiring, or will it lead companies to embrace outsourcing?

That’s the multi-billion-dollar question, and the ultimate answer could have a seismic effect on how many tech companies operate. Of course, quite a bit hinges on whether Trump wins this year’s presidential election; if so, he may extend the ban, which will currently run through the end of 2020. 

Some business leaders and pundits are already predicting that companies will respond by moving at least some of their operations overseas. “Putting up a ‘not welcome’ sign for engineers, executives, IT experts, doctors, nurses and other workers won’t help our country, it will hold us back,” U.S. Chamber of Commerce CEO Thomas J. Donohue wrote in a statement soon after the ban was announced. “Restrictive changes to our nation’s immigration system will push investment and economic activity abroad, slow growth, and reduce job creation.”

There’s some data to back up Donohue’s assertion. Over the past three years, the U.S. government’s visa restrictions have sent tech talent to Canadian cities such as Toronto, according to reports. A 2020 study from Envoy Global found that 74 percent of employers believed Canada’s immigration policy more favorable to their operations than U.S. policy. Around 51 percent were thinking of an expansion into Canada (up from 38 percent in 2019), while 61 percent said they were either sending more people to or hiring more foreign nationals within the country.

“While the States has gone, ‘Let’s make it difficult to get the employees here on a visa,’ Canada’s gone the exact opposite, and it’s beneficial for Canada,” Alex Norman, the other co-founder of TechToronto, told NPR earlier this year. “You had a fast-growing ecosystem here that’s been getting a shot of steroids.”

Will the outright ban on H-1B visas accelerate that trend? It’s difficult to tell at this juncture, although there are also signs of heightened investment in training U.S. workers, especially as the COVID-19 pandemic recalibrates the nation’s ideas of remote work. A month before Trump’s ban went into effect, the American Workforce Policy Advisory Board called for connecting workers to “upskilling and reskilling pathways and ensure they have access to the online tools and distance learning they will need to guide them toward good jobs in rebounding fields.”

When people refer to “rebounding fields,” of course, they often mean tech; the federal government is also pushing apprenticeship programs that could channel candidates into jobs such as coding

“The Great Recession was a lost opportunity,” Lawrence Katz, an economist at Harvard University, recently told The New York Times. “Now, are we going to take this moment to help low-wage workers move into the middle class and give them skills to thrive? Or are they just going to go back to low-wage jobs that are dead ends?”

The Biggest Impacts

Last year, an analysis by the National Foundation for American Policy (NFAP) of U.S. Citizenship and Immigration Services (USCIS) data made it clear that the Trump administration’s earlier restrictions on H-1Bs were crushing business-services and consulting firms in particular. Meanwhile, tech companies such as Apple and Google experienced far fewer H-1B application denials. Check out the chart:

Firms such as Cognizant and TCS, in other words, were already feeling the pressure before the Trump administration instituted its temporary H-1B ban—and this latest executive order could upend their business model entirely.

“Traditional” tech firms will end up impacted, as well, since many drew H-1B contractors from those business-services and consulting firms. The question now is whether they’ll outsource their talent, focus more on expanding their offices in other countries, boost their domestic workforces, or some combination of all of the above. Firms such as Google and Microsoft have talked quite a bit about building out their domestic talent pipelines, particularly in a diversity context; now they may have to deliver more fully on those promises.

52 Responses to “Trump’s H-1B Ban: Boost for Domestic Technologists, or Outsourcing?”

  1. US companies have this visa thing so wrapped up that they will wind up getting their way!!

    Why isn’t anyone taking the side of the American tech worker??!!

    Can’t anyone see this argument is bent toward the advantage of US companies??

    It doesn’t take a rocket scientist to see where this visa argument is headed!!

    Ohhhhh!!! That rocket scientist is offshore, in India, I forgot.

    • If Trump introduces outsourcing tax, then everyone will fall inline and American technology workers will have a life. Otherwise all these companies will take the outsourcing route

      • Doubtful

        Remember everyone, rejection rates mean nothing as long as every available visa is being used. If you are truly concerned that 85k extra workers a year added to the entirety of IT workforce is hurting you, go back to school. I’m currently finishing a BS in Mathematics and I’m in my 40s and yes, it is a pain in rear at times. When people ask what I’m watching on TV, the answer is lectures. By the way, there is a deduction for higher ed if you itemize your return.

        An outsourcing tax you mention would be interesting but the Trump administration is pro-business, period.

        If you look at the tax bill that was passed in 2017, it was a handout to the wealthiest in this country. The tax breaks for businesses were permanent, the tax breaks for the working class, temporary. Not until just before the mid-terms did the WH Administration and Congress scramble to make those cuts permanent because they wanted to appear to working for the working class. I personally pay more in taxes because I itemize and certain deductions were eliminated, my brother saves a little because the standard deduction went up, but it is a deduction, not a credit so it isn’t worth much.

        IMHO, Trump is doing this solely for his base that is against non-white immigration. This push has nothing to do with American workers or he would have worked harder to scrap the program or parts of the program prior to an election year. REGARDLESS OF THE REJECTIONS, NO VISA IS GOING UNUSED. They could have cut the number of visas and allowed visas for only those without a master’s degree but they didn’t.

        Point being, there are so many things this administration could have pursued to legitimately help American IT workers but he hasn’t done any of them, period. Trade Deals, nonsense, still hemorrhaging manufacturing jobs on a monthly basis even before Covid and China isn’t keeping up with their importing agreements.

        I’ve also been in this field long enough to see the jobs go and comeback. Customer dissatisfaction and poor metrics eventually make companies return to US workers until they decide they have to do it to be “competitive.”

        Vote for who you want but this Administration has done zilch to help American IT workers, so let’s not pretend why we vote for the people we choose to elect.

        Choose your values and vote by them.

  2. Jake Leone

    For decades H-1b visas were awarded by an idiotic lottery system, a method gamed and largely won by Offshore Outsourcing companies. The Trump order also includes a provision to change from a lottery over to a system where availability of H-1b visas is determined by a ranking of salary (not random chance), with higher salaries getting a better chance at actually receiving and H-1b visa. Further the median salary will be the lowest possible salary allowed.

    That’s huge change for the better.

    But Joe Biden has said he will rescind the Trump executive order, on Day-1. Look, we just went through the slowest recovery in U.S. History under Obama. All through that period numerous companies used Offshore Outsourcing companies to remove entire departments to other countries. I would say we shouldn’t repeat the same mistakes of the past.

    The H-1b visa, used by Offshore Outsourcing companies, build a 100 billion dollar a year industry, in India. The U.S. is the #1 export market for India. Think about that, and realize that all occurred during the slowest recovery in U.S. History, under Obama (Joe Biden was the Vice President).

    Offshore Outsourcing companies pay the lowest salaries of any of the major H-1b visa using companies. They don’t sponsor people for Green Cards. They don’t create new American citizens. They have one purpose and that is to remove jobs from the United States by getting better qualified, more experienced U.S. STEM and IT workers to train their H-1b replacements.

    The Trump Administration is the first administration, in 30 years, to actually address this problem. Obama could have changed from a lottery system, Bush II, Clinton, and Bush I all kept the lottery system? Why is that?

    Could it be that these Tech companies actually liked the fact that Offshore Outsourcing companies were winning these visas. Many of these Tech companies have huge contracts with the Offshore Outsourcing companies (Google most especially) and so they are really up in arms that Trump is going change this. To something that should help them, but really they are just afraid to come out and say, they want to use the H-1b to Offshore jobs, they have been doing it for years through 3rd party Offshore Outsourcing companies. But that truth is so politically embarrassing that they dare not admit it directly, but instead need to dance around it to continue the rouse.

    • If the Trump administration really wanted to do something they could end it entirely or they could give the H1B holder a path to citizenship that doesn’t cost thousands of dollars and take 10 years. But, they won’t because they are on the side of the company. America is a capitalist society and the American worker has been pushed down and stepped on for decades. Look closely, everything Trump is doing is smoke and mirrors. Contain your excitement. Any company that is offshoring should be boycotted but they are all doing it. They are counting on the American consumer which is also the American worker to prop up the economy by spending money but how can we do that we so many are unemployed and the ones that are employed have lower salaries because that is what the companies want? Can’t have your cake and eat it too. Please don’t base your vote on 1 issue. That line of thinking is what got us into this mess in the first place.

        • When the process takes a prolonged amount of time, employee wants to stay in the company till the process is completed no matter the situation. Employer takes advantage of it and provide little to none salary increments per year, fewer promotions and benefits thus paying relatively less compared to a citizen/anyone who is not dependent on the citizenship. This gives employer incentive to hire more visa based employees as the overcall cost is less, less iteration, less complaints.. you get the point

    • I’m a registered democrat but I will vote for Trump. All this talk about Biden way ahead of Trump is so deja vu. That’s what they said about Hillary. Trump will win again because americans are sick and tired of stagnant rates and wages from the mid 90’s; outrageous tuition fees; not being able to pay high student loans because STEM jobs HAVE gone and are still going to Indian H1Bs past and present.

      • Abdul Debulbulemir

        And what makes you think Trump has any intention of fixing any of these issues. Once he is re-elected, he no longer needs your approval so he will drop you like a hot rock.

      • I cannot consider voting for Biden. What ever happened with the developer who confronted Obama at a campaign stop? – he couldn’t get a job and handed over his resume. There was no followup in the media. What happened after that? We know Obama tried to expand and increase the number of H1b visas at every opportunity. We had Clinton promising the SAME immigration policy that Biden has on his website.
        We CANNOT afford to vote in Biden.

    • Until June 2019 I worked for John Wiley & Sons in IT procurement. My boss was a naturalized American from India. One co-worker was an Indian on an H1B. Wiley used TCS and was dis-satisfied with them and was getting rid of them. Their work sucked! However, Wiley outsourced ALL of its Accounts Payable & Receivables directly to India eliminating an entire department. 60 Americans, some with as many as 35 years with the company were FORCED to train their replacements or NO severance.

      One you Accountant, a man with 4 years in the company vocally refused to train his replacement and was threatened with immediate termination. He saved them the trouble and quit on the spot. He was employed by a Big 8 firm within the week.

      I detest that US companies betray their employees and I absolutely hate INFOSYS, COGNIZANT, TCS, WIPRO and HCL. If I had my way, their employees here would be DEPORTED!

  3. Venkat

    The Student Visa has to GO too! There were several H1B’s that were out of status and shifted into Student Visa just to stay in the US but they are still working as “consultants” this is wrong! There should be an audit on where they are working now. When the pandemic started these “consultants” aka “students” are claiming unemployment benefits – this is WRONG!

  4. As soon Trump announced ban on H1B, Pichai sent 10 billion dollars to India to digitize India. He will hire in India. Why does he not spend that money here? His interests are not in this country. Same goes for Facebook. Facebook said they will send more jobs to work from home, any where in the world. H1B visa holders can work from India less than 6 months, come here for couple of weeks and go back to work from India. They get jobs here and there too. Win-win for India. The big pharma is already shifting there. May be the companies should let American citizens work in countries where ever they are sending jobs to, but those countries do not let workers from other countries, they only want money.
    I never thought I will see the downfall of America in my lifetime.

    • Downfall? Where do you come from? Try other countries before you say ‘downfall’ of the U.S.
      You know why immigrants are struggling like crabs to come to the U.S.? Because the U.S. is indeed a great country.

      • I have many friends who have declined H1b or other work visas to come to the U.S. The U.S. is in decline for decades, look at infrastructure, Healthcare, cost of education, crime in big cities, Trump, etc. You better wake up from your dream.

        • Dude rejecting H1 visa’s is definitely not the downfall of US. USCIS only rejects when there isn’t enough documentation. This happens when the company filing for them is a shady consultancy and/or someone who wants to save some $$ by hiring cheaper immigration lawyers. Also there will be an RFE before rejecting the visa.

          I would suggest ICE/USCIS do a sweep on consultancies as there are some shady consultancies provides candidates with fake resumes which cascades to lower billing rate and shitty job which cascades to paying less salaries. Periodic sweeps on these consultancies should clean the system and increased fair conditions overall

        • Marite

          I have lived in Europe for 20 years (France, Belgium, UK) and this side of the world’s economy is in dire shape.

          If you think US is in decline, then get out and move elsewhere. I am coming home to the U.S.

    • Angry Coder

      I have 30 years experience can’t find a job to save my life. I’m willing to work for less but being American nobody wants to hire me at any price. Seems like my only future is suicide nobody wants my skills because I’m am from this country.

      • I am not sure if this is because of ageism or because of something else. I have seen people who crave for experienced people but they don’t want too much experience. I have seen this in firsthand (I am not claiming everyone is the same), is when they hire people with experience, experienced people doesn’t want to admit defeat when they were wrong or when someone gives review for their work. Sometimes, they dont want to work under managers who are younger than them or have less experience than them. This creates conflicts, low morale etc. Overall companies tries to stay away from them, so does the managers who doesn’t want their position threatened.

        Free suggestion, did you try freelance?

        • Are you serious? The answer is simple – right under your nose. Experienced people (we, americans) will not cram together in a 1 bedroom flat unlike H1B Indian workers – just so we can accept a low paying job and mess up our home lives.

          • I am sorry if I misrepresented what I meant to say. I am not saying experienced people should accept low paying jobs. I am just pointing out what I noticed in the industry when they hire experienced people in non leadership positions. Angry Coder has mentioned he is willing to accept a job with low pay, but the managers/hrs doesn’t see it the same way. I just suggested he shouldnt try to appease them, rather showcase his skills using freelancing so he can get the job he deserves.

      • Angry Ex Pfizer Employee

        In response to Angry Coder, I feel your pain about not finding a job. As a legacy Wyeth employee, Wyeth hired ‘consultants’ to do a job but unfortunately not all were released when the job was completed. Pfizer has continued with the pattern and still have ‘consultants’ from the Wyeth days who have worked there for 20+ years. Are they really employees but these companies don’t want to pay benefits. Pfizer loves to work with IBM; Accenture and Deloitte who are mostly Indian and want there ’employees’ to babysit, however, these consulting companies have more power within Pfizer and are pushing employees out the door, hence, my issue. I spoke up in meetings about the discrimination of employees perhaps too much…Now I’m trying to find a similar position and guess who the recruiters are that call me, Indians. I don’t want to ‘dislike’ anyone however, my feelings toward those who undermine American-born citizens from finding jobs has grown.

      • I have 35 years of experience and I get offers in price range easily. Consider getting new skills. Like becoming software engineer. No just being coder. H1b system is corrupted and broken , yes , but US can’t produce enough talent – crap education system, that keeps declining . New math is a joke.

    • Agreed! American jobs need to be for legal Americans only. H1s etc were never meant to be immigrant visas…so why such abuse.
      India tech cos (and lots of techies) have abused, gamed these visa system for decades now. Time to stop that. Let the h1, l1’s etc come for a stipulated time of 3 yrs–make it mandatory for them to give KT of their work to local folks, and then they should leave back in law abiding fashion, period!

  5. Canada (I am half Canadian) will learn what the US learned, most of these H1Bs are not thought leaders they just middle level tech types, easily replaced. In addition, once they are there it is almost impossible to get rid of them. What the companies don’t like is they have to pay a fair wage.

  6. Uncle Sam

    So much hate here, but I don’t know an American tech worker who doesn’t have a job. Most of the people commenting here are the ones came to US from other countries 2 years ago and got green card, learning software testing and now don’t want to compete with the real talent and wants an easy job.
    If immigration system was fair 90% of H1Bs would have been neutralized citizens by now. How can a person came 1-2 years ago from Iran on diversity lottery without any formal education got GC and an H1B paying taxes for 11 years don’t have a green card yet and still called an H1B. So much for fairness, Think before commenting.

    • I’m an american tech worker and I don’t have a job. I know many that do not have a job. And some that have bitten the bullet of accepting low wages from Indian recruiters and bosses.

    • Username ‘Uncle Sam’ is fooling nobody. The reason there are so many H1b visas trying to get green cards is because we need to apply per-country caps on H1b visas that are consistent with the per-country caps on green cards. Just because citizens of one or two countries oversubscribe the H1b visa is no reason to allow them through the existing limits.

    • You are comparing two different visas. One is the diversity lotery. There are very few Iranians in US, so some might come that way. If you are waiting 11 years on a GC either you are Indian or Chinese. The 7% limit per country is what is creating a line for you. The question is why so many H1-B’s and corresponding green cards, are being issue to non-american companies that are not in the tech sector, but the outsourcing sector, such as Tata, TechMahindra, Cognizant, HCL and others. Those companies cater to replace IT workers from business that are not IT technology in nature. Manufacturing, construction, retail, medical, many outsource their daily IT operations to cheap labor from those companies. That does nothing in terms of benefiting US technology. It just reduces costs for those businesses at expense of local labor. The companies that rake the most profits are not even american companies, are Indian companies, exploring Indian nationals for years, by paying them less than the citizens and greencard holders, keeping them hostage of the process. This kind of locally based outsourcing is not going to move out of the US, but may employ many local IT professionals that used to run IT departments in US firms and are now either unemployed or moved careers as they cannot compete with lowly paid H1B workers.

  7. G Hilte

    US tech job removal is a politically-prioritized, multi-decade corporate initiative generating wealth for a certain number of individuals at the expense of a greater number of Citizens (and at the expense of the country overall—take a look around).

    Tim Cook of Apple hires perhaps thousands and thousands of India workers directly/indirectly because he maybe does not feel that Auburn grads are up to the job?

    For this reason, Governor Ivey, we ask that you sign the Exile bill so Tim Cook cannot re-enter the great state of Alabama.

  8. Most of the companies already had outsourced to India, Infact nearly every one I worked for.

    H1B was just double dipping to exploit cheap labor. Most of the IT recruiting is also by Indians now.

  9. You know what Magicians do? They get attention of the audience on something trivial and with sleight of hands do the trick. Same here, the Government is harping on the H1B visa issue and behind the scenes millions of tech jobs (including IT Management jobs) are going to India.

    Here we are bickering like kids on H1B visa over and over again. I know many companies that have offshored pretty much 80-90% of their workforce. Google just recently announced that it will spend billions of dollars in India.

    H1B was an issue between 1995-2005. Now the issue is offshoring. If we want jobs — and good jobs — back in the US then Government must reprimand the US Corporations from offshoring jobs, or at the very least put a cap that no more than 25% of jobs can be offshored.

    But the truth of the matter is, our Government is slave to the Corporations and it will do every thing to please their Masters; for the rest of us, we will just keep going in circles and whine about the H1B visa, which isn’t an issue anymore. Think!

    • blah blah blah blah. You keep on harping about offshoring. So be it. What offshoring will do is shift the competition IN INDIA – thereby depressing the wages THERE – not in the US. I have worked with developers there. It takes 3 Indian developers to do the job of 1 american developer. They produce very poor quality work over there.

      • @Nancy You certainly have no idea what level the offshoring has gone to. A decade ago, only help desk jobs were offshored, then the entry level engineers, then mid-level, then senior level, and now Managers, Sr. Managers, Directors, Sr. Directors, VP, and SVP. If you have friends in IT services companies, ask them, they will tell you that pretty much all the jobs have been offshored. It’s a myth that only lower-level jobs have been offshored.

        Nowadays, corporations are not looking for quality at a high price but quantity at a low price.

        When jobs are offshored, only corporations fill up their pockets — which does not benefit the country’s economy or its citizens.

          • Exactly. I simply don’t understand the thought process of hiring talent less developers, this will lead to low quality code and there by reducing the popularity of their products. In the generation where every product being purchased is reviewed and people are not hesitant to provide negative review when they don’t like the product, how does these companies stay afloat if they hire bad developers to create their products?

          • That is the problem of the current short term corporate mentality. Save some bucks today and get my targets in line, for this year/quarter. Next year it might be someone else’s problem. The old adage that “you can either get cheap or good”, or “you get what you pay for” are as true for IT as it is for any service. Of course there are very talented Indian programmers. But the business is not about quality, is about quantity. A great Indian programmer that does quick and high quality work is not as interesting as a team that takes weeks to complete the job when you are quoting and executing by the hour. Price competition without good quality control leads to cheap and low quality, but you only find out years into it. See what Boeing got itself into. It may take years to recover.

  10. I’ll agree to this article in principle but only I never hear that there is a shortage of skilled US workers.

    A compromise you ask. Ok, I settled for this statement instead.

    There is a shortage of cheap labor than can not be held hostage with threats of deportation

  11. Chris Dano

    All I know is this. I’m a UCE. In my wildest dreams I never thought Infosys would offer me a job not only did they offer me a job (which I turned down) a month later they offered me another. Here’s another tidbit. A major insurance company had all their IT outsourced to Infosys. They got the boot and this company went on an IT hiring spree. So the authors comments are ill informed more job are going to US citizens. Bout time.

  12. All kinds of visa fraud exists, not just H-1B.
    All kinds of work including customer service also going offshore. Government can cut offshore by imposing higher tax.
    New H1B memo (no job verification, control over employees on daily work while working at third party etc) opened the doors again for H1b fraud. I think at present all h1bs are getting 3yr approvals with the new memo.
    US is already over crowded.
    Only Trump can save Citizens by stopping illegals, birth right citizenship, and non-immigrant visa (all types)/family chain immigration imports.

  13. H1B Problems

    President has promised for RAISE Act, which would probably change the fate of Indian’s who are on H1B. This gives them a fair, transparent chance to compete, and live with out being complained about them, mainly avoiding trouble to American Tech workers. I love his idea

  14. There were probably good intentions in this, but because it’s the Trump administration it will surely be bungled. Or we can say that someone personally connected to the president, his family, or the RNC is making money out of the policy.

    From what I’m reading in the article, this policy is still focused on the symptoms not the cause. That’s a reaction, not a policy.

  15. Joseph Subits

    Offshoring has been going on since the 1990’s and started with mainframe technology believe it or not. The only way to control it or kill it all together, is to tax the companies that do it by the hour for the difference between the offshore wage and the onshore average wage, by skill set. Then take all of the wage taxes and send them back into the STEM education system in the US for Citizens and Green Card Holders. Yes it a tariff on “imported” services but it is the only way to prevent the rest of the world from abusing the United States, using our own idiotic trade laws against us.

  16. One-word, Capitalism. 90’s Companies offshore workers because they “think” they can profit. Really? When the economical tide turns back, it is totally different. Today BRIC is no longer “poor” countries. People come to USA from other countries because of “security”, we have the biggest military (budget or ability), not necessarily for economical reason. Can American dollars sustain this activity in long term? American has to have strong dollar (low inflation), strong economy, strong military. Can we betray our allies for economic reasons? If onshore now is more profitable? Extreme capitalism is no good. Social Security, Medicare, Unemployment benefit, Workerman’s comp are all social programs. Capitalist will let people die on the street and still count their money. This happened early 1900.