H-1B lottery leaves 39,000 out of luck, shortage to hit Indian firms

New York: For the first time since the financial meltdown in 2008, the US government conducted a lottery selection process on Sunday to award H-1B visas to Indian and other highly-skilled foreign workers. After being swamped with 124,000 applications in five days, but having only 85,000 visas to give, US Citizenship and Immigration Services ran two computer-generated lotteries on Sunday to award the available visas. There aren’t any signs that the wave of foreign students coming to America is cresting. The agency received an overwhelming number of applications for the 20,000 slots allotted to foreign graduates of US universities with advanced degrees. [caption id=“attachment_691331” align=“alignleft” width=“380”] Immigration officials will begin notifying winners and losers next week. Reuters[/caption] Immigration officials conducted two lotteries. The first was for the 20,000 H-1B slots reserved for those who have advanced degrees. Anyone who lost that lottery was placed into the larger pool of 65,000 visas. Immigration officials will begin notifying winners and losers next week. The work visa shortage is likely to raise costs in the short term for Indian firms like Tata Consultancy Services, Infosys and Wipro which are heavy users of H-1B visas. Indian companies say they will have to turn to short-term US hires to fill job vacancies, which will cost more. “If the visas are not available, we will have to depend on subcontractors in the US in the short term,” a senior executive with one of the top Indian outsourcing companies, told The Wall Street Journal. Even without visas being so scarce sub-contracting costs for Infosys, India’s second-largest software company by sales, jumped to the highest ever level in the final quarter of 2012, or 4 percent of revenue, pointed out analyst Shashi Bhushan of Mumbai-based brokerage Prabhudas Lilladher. Sandeep Muthangi, an analyst with Mumbai-based brokerage IIFL Capital, also told the Journal that hiring sub-contractors in the US may raise the overall cost of operations for Indian IT providers by more than 10 percent a year. Indian companies are trying to grab as many H-1B visas, which are granted for three years but can be renewed for a total of six years, as the new immigration bill is a work in progress. US visas for highly-skilled foreign workers could double under a new Senate immigration plan, but worryingly last month Republican Senator Charles Grassley introduced new legislation to undercut some of the gains for foreign companies trying to acquire work visas. Indian executives fear that Grassley’s proposal, dubbed H1-B and L-1 Visa Reform Act of 2013, could make it into the broader immigration bill. Grassley’s proposal seeks to deny H-1B visas to those firms with more than 50 employees and 50 percent or more of its employees already on work visas. It also asks companies to pay prevailing US wages to visa holders and seeks to raise penalties on those companies flouting existing visa rules. The speed with which the cap was reached this year has Silicon Valley up in arms. A trade group that represents Google, Yahoo, Intel and other tech giants said talented engineers and innovators were “capped out” of the US economy. “Our country’s current immigration policy has created a classic lose-lose situation for our economy," said Rey Ramsey, CEO of TechNet, in a statement. “Tens of thousands of talented graduates from all over the world have been ‘capped out’ of the opportunity to work in the US, while American employers are denied access to legions of bright and motivated candidates. It would be difficult to imagine a less rational system,” added Ramsey.