Tech companies in the United States are using the H-1B visa to hire the people they need, but tech companies from India, for example, are flooding the H-1B system with petitions and fill positions from India to fulfill their own job-market predictions. (Courtesy photo)

H-1B visa: Gateway to outsource San Francisco jobs

In my last column, I wrote about the H-1B visa system and its many issues, one of which is the lottery scheme to approve petitions. I concluded that one of the ways to move forward is to increase the H-1B quota. In this column, I present the short traversable distance between hiring low-cost H-1B workers from other countries and outright sending jobs to other countries.

In November 2016, UC San Francisco released a media statement explaining that it had entered into a contract with HCL, an Indian software/outsourcing company, “for specified IT services, a move that will save the university more than $30 million over five years and allow it to meet sharply increased demands for IT capacity and strength …” UCSF indicated that 49 IT career positions were to be terminated, amounting to 8 percent of UCSF’s workforce. Another 48 contract positions were also to be eliminated.

By the end of February, close to 100 San Francisco jobs will be moving to India. This is not the end of it. PG&E also announced the California utility company will be sending 70 IT jobs to India via Tata Consultancy, another Indian outsourcing company.

Hank Nguyen is a casualty of UCSF’s decision. Nguyen was interviewed by Sam Harnett on, where he beseeched, “How can they do this to us?”

Nguyen arrived in America in 1981 and taught himself the skills required to work on IT servers. His daughter enrolled at UC Santa Cruz, intending to follow in her father’s footsteps in the tech industry, with a degree in computer science. However, as Harnett reports, two letters arrived last July. “The first was the tuition bill from Santa Cruz,” he said. “The second was a layoff notice from UCSF.”

The outsourcing of local jobs to India and other countries is a surefire way companies can lower costs and increase profits. An admirable capitalistic goal, no doubt, but what of the social impact?

Claims of discrimination

On Nov. 14, 2016, upon receiving notice of termination, a group of nine employees who were laid off — Robert Harrison, Kurt Ho, Audrey Hatten-Milholin, Brian Joyner, Leland Lam, Jason Macatangay, Emerson Mendoza, Vinny Tateo and Nancy Toth — brought a complaint against UCSF to the Department of Fair Employment and Housing, alleging the university “discriminated against them based on their national origin, age, sex, and/or race.”

The complaint notes they were forced to train their “significantly younger, male HCL replacements, who will then perform the work overseas.”

It is more than likely that several HCL replacements for UCSF came to the United States to be trained on an H-1B visa. The H-1B visa is the gateway through which American jobs are shipped abroad. That’s why it’s often referred to as the outsourcing visa.

This is for three reasons: An H-1B worker is paid less than a U.S. worker by outsourcing companies; the H-1B worker is encouraged to learn the job and revert back to the home country, taking the job with him; and outsourcing companies have commandeered the market for H-1Bs.

Low wages and flooding

A fascinating study of numbers on reveals that between 2014 and 2016, Twitter filed for 934 labor condition applications for H-1B visas, Facebook filed for 2,959, Microsoft for 13,354, HCL America for 15,791, Tata Consultancy for 43,794 and Infosys for 82,506. The latter three are Indian companies.

Ostensibly, Twitter, Facebook and Microsoft are using the H-1B visa to hire the people they need. But HCL, Tata and Infosys predict a market need, flood the system with petitions and fill positions from India to fulfill their predictions. By 2001, India was the largest source of H-1B petitions.

In fiscal year 2016, the average salary for an H-1B at Infosys was $81,705; at HCL, it was $84,040. In contrast, at Google the average H-1B salary was $129,997, and at Amazon $121,850.

It’s no secret that more than half of the H-1B visas go to outsourcing companies. Back in 2015, reported that “while the law might prevent a company from directly replacing workers with immigrants on temporary employment visas, it doesn’t prevent companies from outsourcing their services to a third party, such as Infosys.”

Hiring in America

Interestingly, Infosys co-founder Narayan Murthy told the press recently that Indian IT software companies must stop recruiting people on H-1B visas from India and to focus on local hiring in the United States — sage advice from the founder of a company that has largely profited from the H-1B visa program.

But Murthy is right, our businesses must hire H-1B workers from our own schools and colleges, first. And I’m not entirely convinced we have a shortage of graduates.

According to a Pew Research study, in the year 2013-14, there were more than 179,000 international students graduating with degrees in math, computer science or engineering — more than double the H-1B visa quota of 85,000 (including 20,000 for postgraduates).

Since the H-1B system has been flooded by outsourcing companies that find it advantageous to hire tech workers from overseas who are willing to work for much less than the going rate, there seems to be a perception of H-1B shortage here in America.

Yet, I believe we do have enough graduates to satisfy our current H-1B quota of 85,000 right here in the U.S. If we have the need, we also have the people, people that our schools and colleges have trained.

Jaya Padmanabhan can be reached at Twitter: @jayapadmanabhan. In Brown Type covers immigrant issues in San Francisco.

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