January 11, 2024

By Ignatius Chithelen*

This week technology companies in the United States resumed cutting jobs, including about 1,800 at Unity Software, roughly 1,000 at Google, and several hundred at Amazon.

Unity cut “approximately 25% of its current workforce, as it restructures and refocuses on its core business, and to position itself for long-term and profitable growth,” the company stated in a regulatory filing.

In 2023, more than 262,000 jobs were cut by around 1,200 U.S. technology companies, according to layoffs.fyi. They include 27,000 at Amazon, more than 12,000 at Google and more than 10,000 at Microsoft.

Last month, about 350 contract workers and employees were laid off by Enphase, a Fremont, California based company. The vendor of microinverters for solar power systems, with a market value of $15 billion, also announced a hiring freeze for this year.

“I take full accountability for these decisions and how we got here,” Badrinarayanan Kothandaraman, chief executive of Enphase wrote in a blog post. “I understand this is difficult for all of us, especially when it impacts our valued colleagues and friends who are departing.” Kothandaraman, 52-years-old, emigrated from India, after earning a B.Tech. in Materials Sciences from the Indian Institute of Technology, Madras, 1993. He earned a Masters in Materials Sciences from the University of California, Berkeley, 1995.

“There's no good way to share news of a restructure but it’s in our culture to be committed to candor and care, today and always,” Maju Kuruvilla, CEO of San Francisco based Bolt, wrote in a blog post last month. Kuruvilla’s post did not state the number of job cuts at the payment platform for online retailers. They reportedly totaled about 100 employees, or nearly a third of Bolt’s staff.

In January 2022, Bolt raised $393 million in new funding, at a reported valuation of $11 billion. That year, the U.S. Securities Exchange Commission (SEC) began an investigation of the company and its founder Ryan Breslow, 29, over investor allegations of making “material misrepresentations about the Company’s financial condition and product pipeline.”

In August 2023, after a fifteen-month investigation, the SEC took no action against Bolt and Breslow. Bolt reportedly has around 200 employees, down from around 1,000 in 2022.

Kuruvilla, 48, emigrated to the U.S. after earning a BS in Computer Engineering from Mangalore University, India; he earned an MBA from the University of Washington. 

More than a third of tech layoffs in the U.S. involve Indians on H-1B and L-1 visas, temporary work visas for foreigners with special skills and managers on intra-company transfers respectively, according to Business Insider.

In 2022 and 2023, an estimated 150,000 Indians on temporary work visas in the U.S. - many of them waiting in line for permanent residency or green cards - were laid off. But the total number of temporary Indian workers in the U.S. who effectively lost their jobs is much higher.

Indians and other foreigners can work in the U.S. on a H-1B professional visa for a maximum of six years; they can work longer if an employer sponsors them for a green card. Also, there are 69,000 Indians working on two-or-three-year practical training (OPT) visas, following graduation from U.S. universities. They hope to continue to find work on H-1B visas, after their OPT visas expire.

Each year, there are several thousand Indians on OPT visas who are not hired on H-1B visas, as well as thousands more on H-1B visas who are not sponsored for a green card. Their employment ends after two or three years for those on OPT visas, or six years for those on H-1B visas. Such job cuts, which total several thousand each year, are typically not disclosed by employers on technical grounds that an employee’s work visa had expired.  

Executives at major U.S. tech companies and their lobbyists issue periodic statements asking the U.S. administration to issue more green cards. Yet, despite their massive financial and political clout, the tech companies have not gotten an increase in green cards over the past 32 years.

It appears that companies in the U.S. manage their supply of entry level engineers, and other highly skilled professionals, by using the swing labor capacity provided by foreigners, mainly Indians, and the system of temporary work visas.

Tech companies in the U.S., working with outsourcing companies, use the excess supply of Indians to cap the salary for their staff, at least at the lower levels, according to the Economic Policy Institute, a Washington DC based non-profit. The major outsourcing companies operating in the U.S. include Infosys and Tata Consultancy from India.

Lobbyists for tech companies say that foreigners on temporary work visas do not suppress wages paid to professionals in the U.S. In 2021, the median wage of H-!B employees was $108,000, 52% higher than in 2003, while the median wage for a U.S. worker rose by less - 39% - over the same period, according to the American Immigration Council.   

In all, tech companies in the U.S. and Canada employ about 10 million software engineers, according to Centennial.AI, a Sunnyvale, California-based recruiting firm.

Indians, mostly software engineers, account for more than 70% of 600,000 foreigners currently working in the U.S. on professional work visas. So, Indians on temporary professional and practical training work visas, likely account for at least five percent of the total supply of software engineers in the U.S.

More important, being on temporary work visas, companies can lay them off as well as replace them with more qualified or equally qualified cheaper hires. This is because, every year, a fresh batch of several hundred thousand Indians and other foreigners, who graduate from U.S. universities, eagerly seek jobs in the U.S. on temporary work visas.  

Such swing capacity of highly skilled labor, provided mainly by Indians on temporary work visas, is evident from hiring and lay off data. In 2022, for instance, the top 30 H-1B employers hired more than 34,000 new H-1B workers, according to a report by the Economic Policy Institute. In 2022, and the first quarter of 2023, the top 30 H-1B employers also laid off at least 85,000 H-1B workers.

In fact, software engineers stay on their first job for less than three years, according to Centennial’s data. Engineers, who are U.S. citizens or permanent residents, may move to a better job. But Indians on temporary work visas do not have this option. If they leave a job, where an employer sponsors them for a green card, they go back to the end of the green card line, currently more than a 17 year wait – assuming they find a new employer who sponsors them for a work visa and a green card.

The jobs cuts by U.S. tech companies in 2023 were 50% higher than those in 2022. The roughly 180,000 layoffs in 2022 were more than six times higher than in 2021.

U.S. tech companies hired hundreds of thousands of engineers and other technical staff in 2020 and 2021, when their business boomed during the COVID-19 pandemic period. Then, as demand cooled in 2022 and 2023, they found they have excess staff and had to slash jobs, analysts and media pundits say.

Whatever the rationale, employee layoffs are the key way companies in the U.S. cut costs, shift strategies, and try to boost profits. This is especially the case for technology, finance and service businesses where employee wages and benefits account for a major portion of operating costs. Companies in the U.S. face few, if any, legal or other restrictions on cutting jobs, whether contract or staff workers.  

Speaking about Google’s job cuts this week, a company spokesperson told CNBC,  “a number of our teams made changes to become more efficient and work better, and to align their resources to their biggest product priorities.”

Most large companies give laid off employees, including foreigners on temporary work visas, a severance package, which includes salary for a few months and job placement services.

Yet, as several stories in the American media point out, layoffs negatively impact the lives of professionals and their families, just as they hurt other workers, even in the U.S. where losing jobs is viewed as part of one’s life-long career journey.  

“Layoffs literally kill people,” Jeffrey Pfeffer, a professor at the Stanford Graduate School of Business, told Stanford News. The stress layoffs create takes a devastating toll on behavioral and physical health and increases mortality and morbidity substantially, he said.

The impact of layoffs is far worse on highly skilled foreigners on temporary work visas, the foot soldiers who carry out lower-level technology tasks at U.S. companies. They face major financial issues, in addition to psychological and other health problems.

The foreigners are ineligible for unemployment benefits. Also, they have only 60 days to find another employer, to sponsor them for a new temporary work visa, or leave the U.S. If, they leave the U.S. they forgo their contributions made to Social Security, a government-run retiree benefit plan. Over a three-year period, this could total $15,000, assuming an annual salary of $80,000.  

The situation is worse for Indians on temporary work visas who are laid off in the U.S. or those graduating from U.S. universities. They need to find well-paying jobs, in the U.S. or elsewhere, just to be able to repay their education debts. They typically take on bank loans, ranging from $100,000 to more than $200,000, to pay the fees and other costs for their U.S. degrees. Often, the family home in India is put up as collateral for the loans, which carry annual interest rates of more than 13%,

Indians on temporary work visas, laid off in the U.S., or fresh graduates from U.S. universities, who cannot find a job in the U.S., pursue various alternatives: some migrate to Canada, which was the best option, before tensions rose between Canada and India in 2023; since 2022, some, who graduate from the top 19 U.S. colleges, move to the U.K. on two or three year temporary work visas; some take up jobs in Saudi Arabia and other Middle Eastern countries; some take on more debt – compounding their risk of debt defaults - to pursue additional degrees in the U.S., in the hope of finding a job on a new temporary work visa; and some, especially those who are not burdened by education loans, return to India.

Indian graduates of U.S. universities are eager to find work in the country, even for two to six years on temporary work visas, in order to pay down at least part of their education loans.  

There are currently 270,000 Indians studying in the U.S. This is more than four times the total number of Indians on student practical training work visas.  

Less than one in five Indians who graduate from U.S. universities in the next year or two, even those with advanced degrees from the top universities, may find jobs in the U.S. This is partly because U.S. businesses are unlikely to hire more foreigners on temporary work visas than they did in 2022 and 2023.

Also, many U.S. universities, from state institutions to Ivy League schools, have boosted the supply of graduates. To offset budget cuts and rising costs, they have created dozens of new programs, mainly Masters’ degrees in science, technology, engineering and math (STEM), many of which are likely to be of much lesser or questionable value.

Worse, many universities have sharply raised the number of students admitted to Masters’ programs, especially STEM programs, which qualify foreigners for a three-year practical training work visa, compared to two years for non-STEM graduates. Several U.S. universities pay fees to recruiters in India for referring and recruiting students.

Total annual fees and other costs at universities range from $60,000 to $100,000. Many programs offer teaser “scholarships” that cover only 10% to 20% of the total costs. Apparently, they expect Indians – as well as other admitted students - will take on loans to pay for the rest of their expenses.

Getting a practical training work visa and then a professional work visa are only the first hurdles for Indian professionals seeking a career in the U.S. There are roughly a million Indians and their family members in line for permanent residency visas for professionals. Each year only a limited number of green cards are issued. Also, the total recipients from any country cannot exceed 7% of the green cards issued. As a result, Indian professionals have at least a 17 year wait to get a green card.

Highly skilled Indians should follow the path pursued by many of the top graduates of the world-renowned Indian Institutes of Technology. They take up well-paying jobs at Google, Microsoft, or other global companies in India. Some of them get transferred to higher paying postings in Singapore, the Middle East, Western Europe, and the U.S. This path allows Indian professionals, who work in India, to earn a good income while avoiding up to $200,000 in debt to pursue advanced degrees in the U.S. in the hope of finding a job and a green card in the U.S.  

According to a study by the Cato Institute, a policy organization based in Washington DC, “New applicants from India will face a lifetime wait, and more than 400,000 will die before they receive a green card.”

*Ignatius Chithelen is author of Passage from India to America and Six Degrees of Education.

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