Immigration Fight: Tech vs. Tech

BusinessWeek reveals the top 200 users of H-1B visas and how the likes of Microsoft and Oracle compete with outsourcers for them

by Peter Elstrom and Moira Herbst

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With policymakers in Washington in the midst of a contentious debate over immigration reform, a rift is developing within the technology industry about how to handle high-skill workers from other countries who come to the U.S. for jobs.

On one side are companies like Microsoft (MSFT), Oracle (ORCL), and Intel (INTC). On the other are technology outsourcing firms, including Infosys Technologies (INFY) and Wipro (WIT) of India, and Cognizant Technology Solutions (CTSH), headquartered in New Jersey. The split may ultimately affect whether comprehensive immigration reform comes this year and, if so, what form it takes.

Senate Quizzes Indian Companies

The rift has emerged because of the starkly different ways the two groups of tech companies are using U.S. laws to bring foreign workers into the country. Microsoft, for example, often uses temporary work visas, known as H-1Bs, to hire high-level foreign programmers and engineers as they graduate from American universities, and then helps them gain American citizenship so they can stay in the States. In contrast, Wipro brings in many employees from its India operations to work at client facilities and then rotates them back to India so they are more effective at providing tech support and other services to clients.

The Indian companies have come under fire over the issue in recent weeks. Politicians, led by Senator Dick Durbin (D- Ill.), say the H-1B visas are being used to outsource American jobs to other countries. In a speech earlier this month, Durbin said he's concerned the program is "being abused by foreign companies to deprive qualified Americans of good jobs." On May 14, Durbin and Senator Chuck Grassley (R-Iowa) sent letters to nine Indian companies requesting detailed information on how the companies use the temporary work visas (see BusinessWeek.com 5/15/07, "Crackdown on Indian Outsourcing Firms").

Durbin and Grassley want data on a number of topics from the nine Indian outsourcers. They want to know how many U.S. citizens each employs, how much they pay their workers, and whether hiring H-1B workers has resulted in any layoffs.

Arguments over the issue are sure to intensify in the next few days, as companies are expected to submit their responses by May 29. Infosys, Wipro, and Cognizant all declined to comment for this article.

U.S. Tech Could Stall Process

In the meantime, Microsoft, Oracle, and others are scrambling to defend their own interests. They worry that a crackdown on outsourcing companies could also hurt them. The comprehensive immigration-reform proposal now being debated in the Senate includes several provisions championed by Durbin they consider too harsh. "If there are abusers, we should target those companies abusing the system," says Jack Krumholtz, managing director of federal government affairs at Microsoft. Says Robert Hoffman, vice-president for congressional and legislative affairs at Oracle: "We think that legitimate concerns should be addressed."

The tech industry's support is critical. The Senate is now debating a bipartisan proposal to overhaul the immigration rules for both high-skill and low-skill workers, including the estimated 12 million undocumented people presently in the country.

But the proposed legislation has drawn fire from all sides and its success is very much in question (see BusinessWeek.com 5/18/07, "A 'Troubled' Immigration Reform Proposal"). Conservatives have blasted what they call "amnesty" provisions for illegals, and pro-immigrant groups are hammering measures they deem "anti-family." The tech industry has expressed strong opposition to both the tighter rules for temporary workers and a complex point system for awarding green cards.