U.S. Job Losses Not Due to H-1B Visas: NFAP Report

New H-1B visa holders don't make much of a dent in the U.S. workforce, according to a report by the National Foundation for American Policy.

US lawmakers may be busy putting restrictions on the country's primary temporary work visa, H-1B, but new H-1B visaholders each year represent just seven in 10,000 civilian workers in the US, according to a report by an American public policy organisation.

As per the report by the National Foundation for American Policy (NAFP), 1,07,686 new H-1B petitions were approved by the US Citizenship and Immigration Services in 2008, including those exempt from being included in the H1-B quota of 85,000 visas annually. In comparison, the American civilian labour force stood at 154.6 million in 2008.

The US Senate recently cleared a bill that restricts hiring of H1-B visa holders by financial services firm receiving government bailout funds. The NAFP report proves that the US backlash against H-1B visa usage, led by senators Chuck Grassley and Dick Durbin, is uncalled for, according to the Indian IT industry. "There are over 5 million unemployed people in the US. How can 65,000 H-1B visa holders be held responsible for job losses?" said an executive at a large Indian IT firm that figured among the top 10 H1-B users.

The report also noted that Indian IT firms utilised only 11.9% of new H-1B petitions issued in 2008, contrary to popular perception in the US that these firms use up most of the visas.

Indian firms' usage of the visas declined by 27% between 2006 and 2008. H-1B visas bagged by Indian IT companies, including US-headquartered Cognizant which has a large presence in India, came down from 17,550, or 15.1%, of total H1-Bs issued in 2006 to 12,810 in 2008. Pointing out that market realities determine the demand for H-1B visas, NFAP said that companies didn't hire more H-1Bs in 2002 and 2003 when the cap was increased to 1,95,000 from 85,000. "Firms did not hire more H-1Bs in those years just because the cap was higher," the study said.

Despite the economic slowdown and a likely reduction in the number of applications, it's expected that the H-1B visa quota for 2010 will be exhausted within days when the process starts on April 1, on the back of pent-up demand.

In its recent meeting with US government representatives, Indian IT-BPO association Nasscom said that any protectionist measure by the world's largest economy would only prolong its recovery from recession. It offered to work with American policymakers on visa laws to plug loopholes.

"While the xenophobes go on their witch-hunt and blame immigrants for the loss of jobs, the best and the brightest are leaving the US and taking the economic recovery with them," says Duke University professor and Harvard researcher Vivek Wadhwa.

A recent report by Prof Wadhwa and his team found that Indian and Chinese professionals leaving the US are finding greater opportunities in their native countries than ever before.

TCS, Wipro explore eco initiatives

Moving from traditional areas of expertise, Indian IT majors like Tata Consultancy Services (TCS) and Wipro are now offering services in diverse areas like water treatment, waste management and online healthcare, reported mint.

Wipro arm Wipro Ecoenergy, has begun offering water treatment solutions based on recycled waste water and harvesting rain water. Apart from that, the company is also exploring business opportunities in waste management, following its experiment of reducing liquefied petroleum gas consumption by using biomass gas generated from organic waste to cook food at its Electronic City campus in Bangalore.

Anurag Behar, corporate vice-president for community and social initiatives at Wipro said, "You will not see any business impact in two or three quarters. But Wipro is at least 60 years old and there are decades more to come."

According to a company spokesperson, TCS is commercializing a healthcare portal called WebHealth Center, a free online and tele-link medical consultancy that allows doctors and patients to get advice from speciality hospitals. The system also can store patients' health information securely for doctors to access for reference and provide advice.

BearingPoint sells assets; Deloitte gets government business

BearingPoint Inc., a consulting company based in McLean, Va., that filed for Chapter 11 bankruptcy protection in February, will sell most of its assets, with Deloitte picking up the consulting firm's U.S. government business.

According to a company statement, “BearingPoint and Deloitte have entered into an asset purchase agreement by which Deloitte will purchase a significant portion of BearingPoint’s largest business unit, Public Services, for a price of $350 million, subject to adjustment and customary closing conditions.”

Global IT spending to fall nearly 4%: Gartner

Information technology (IT) spending is expected to fall nearly four percent this year, the biggest slowdown since the dotcom bust of 2001, market research firm Gartner Inc. said on Tuesday.

Gartner forecast that worldwide IT spending would decline 3.8 percent in 2009 to 3.2 trillion dollars from last year's 3.4 trillion dollars.

"IT organizations worldwide are being asked to trim budgets, and consumers are cutting back on discretionary spending," said Richard Gordon, research vice president and head of global forecasting at Gartner.

"The speed and severity of the response by businesses and consumers alike to these economic circumstances will result in an IT market slowdown in 2009 that will be worse than the 2.1 per cent decline in IT spending in 2001 when the Internet investment bubble burst," he said in a statement.

Gartner lowered its forecasts for all four key market sectors -- hardware, software, IT services and telecommunications.

It forecast spending on computing hardware in 2009 of 324.3 billion dollars, a decline of 14.9 percent from the 381 billion dollars spent last year, when the sector recorded growth of 2.8 percent over the previous year.

Software spending was predicted to rise by a marginal 0.3 percent this year to 222.6 billion dollars from the 221.9 billion dollars spent last year.

IT services spending was forecast to fall 1.7 percent to 796.1 billion dollars from the 809.5 billion dollars of 2008.

Telecommunications spending was expected to fall 2.9 percent to 1.89 trillion dollars from the 1.95 trillion dollars spent in 2008.

Gartner said government stimulus package spending "will not be able to offset this bleak near-term outlook.

"Until global financial markets stabilize, global GDP growth, including IT spending, is unlikely to strengthen," it said.

"IT vendors should plan for business and consumer spending to be curtailed during 2009 and for a slow, prolonged recovery during 2010," Gordon said.

More Layoffs Hit hi5

Layoffs confirmed at hi5, the third largest social network in the world, is laying off employees today. hi5's VP of Marketing, Mike Trigg, wouldn't say how many employees were being let go but we've received multiple independent tips that the social network laid off 50% of its staff. Previous to this round of layoffs, hi5 employed around 100 people. Trigg said the layoffs were due to a "realignment of the company" and that it was also a cost-cutting measure. Obviously, revenues were not keeping up with costs.

The social network recently went through a previous round of layoffs last October, letting go 10 to 15% of its staff due to another "restructuring." hi5 gets about 63 million monthly unique visits worldwide but only 3.7 million of those are from the U.S., according to ComScore's February stats. The site boasts close to 80 million registered users but apparently many of these users are just not in markets that advertisers find particularly appealing.

Hi5 is the third largest social network in the world. Facebook is the most popular social network worldwide with 275.6 million unique visitors, with MySpace is coming in second with 125.8 million unique visitors. Orkut is No. 4 with 51.7 million.

300 Satyam employees(Merrill Lynch project) join BankofAmerica

Even as most of the 50,000-odd employees at Satyam Computer Services remain concerned about job and pay cuts, 250 to 300 employees working on the Merrill Lynch project have accepted an offer from Bank of America (BofA), the bank that bought the sub-prime meltdown-hit investment bank in September last year.

The first known instance of what is known as “rebadging”, these employees will join the BofA office at Hitec City between April 2 and 8. They have been given salary raises of around 10 per cent and a bonus depending on their skill sets (Rs 1 lakh in some cases). “The bonus will be given after about 45 days of joining,” said an associate.

Most of the employees on the Merrill Lynch project work from Satyam’s Bahadurpally office. Their work is to provide infrastructure support and handle the database of the financial management and advisory firm.