TCS, Infosys and Wipro Hit Hard by U.S. Visa Drop

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Key Takeaways

01

H-1B visa approvals for Indian IT firms like TCS and Infosys have significantly declined in fiscal year 2024.
02

Policy changes, economic pressures, and strategic shifts drive this decline in H-1B visa reliance for Indian IT companies.
03

Indian IT firms are adopting local hiring, remote work, and digital transformation to mitigate reduced visa approvals.

The fiscal year 2024 has brought significant changes to the H-1B visa approval landscape for Indian IT companies like Tata Consultancy Services (TCS), Infosys, and Wipro. These companies, known for sending skilled professionals to the United States, are now facing a surprising decline in approvals. This decline is not just a number; it tells a deeper story about policy changes, economic pressures, and shifting strategies.

What Do the Numbers Say?

TCS, Infosys and Wipro Hit Hard by U.S. Visa Drop

In FY24, the seven top Indian IT firms, including TCS and Infosys, received just 7,299 H-1B visa approvals for new jobs in the U.S. This number has more than halved since FY15, when 14,792 approvals were recorded. For context, these approvals make up only 5.2% of all H-1B visas given and a tiny fraction of the U.S. civilian workforce. Infosys got 2,504 approvals, TCS received 1,452, and Wipro’s numbers trailed further behind. In comparison, Amazon, a major American company, led with 3,871 approvals despite facing its own decrease.

Reasons Behind the Decline

Policy Changes and Stringent Regulations: The U.S. immigration policies have become more strict in recent years. Back when Trump was president, there was a lot of scrutiny on H-1B applications, leading to more rejections. Even though rejection rates have since dropped to 2.5% in FY24 from 3.5% the previous year, the past policies still affect Indian IT firms.

Change in Company Strategies: Indian IT firms are finding new ways to work without relying heavily on H-1B visas. This includes hiring more local talent in the U.S. and offering Green Cards for long-term employments. Plus, with the rise of remote work, companies are better positioned to serve clients without relocating staff.

Economic Factors and Cost-cutting: Slow business growth and a focus on saving costs have prompted companies like TCS and Infosys to cut travel and visa expenses. These cost-cutting measures are evident in their operations as they’ve adjusted their budgets over the years.

Rising American Competition: American tech companies like Amazon and Tesla are making their mark in the H-1B space. Tesla’s 742 approvals in FY24, more than doubling from the year before, highlight their growing need for unique talents.

Future Policy Changes: As the U.S. gets ready for another presidential election in late 2024, Indian IT companies are preparing for possible changes in trade policies and visas. Concerns about returning to stricter policies if Trump becomes president again loom as a possible challenge.

Impact on Indian IT Companies

The decline in H-1B visa approvals has several implications for companies like TCS, Infosys, and Wipro:

Operational Hurdles: With fewer on-site workers, these companies might find it harder to serve U.S.-based clients directly, leading to operational challenges.

Increased Costs: Bringing on local staff or sponsoring Green Cards often costs more compared to using H-1B visas.

Shift to Remote Work: To tackle these issues, Indian IT companies are increasingly turning to remote work, allowing them to continue serving their clients without relying on visa-based employees.

Revenue Concerns: The U.S. is a major source of revenue for these firms, and any disruption in their ability to serve this market could negatively impact their financial performance.

Strategic Responses

To adjust to the evolving landscape, Indian IT firms are focusing on several strategies:

Local Hiring Initiatives: Companies like TCS and Infosys are increasing their efforts to hire U.S.-based employees, which helps them adhere to local regulations and strengthens their relationship with clients.

Digital Transformation: These firms are investing in new technologies like artificial intelligence (AI) and cybersecurity to stay competitive despite operational constraints.

Upskilling Workforce: By enhancing the skills of their current workforce in India and abroad, they aim to meet client demands more effectively.

Remote Delivery Models: Remote work is becoming a key part of their operations, allowing them to deliver services without a heavy reliance on visa-dependent employees.

Advocacy and Collaboration: Indian IT firms are working with policymakers and industry groups to push for more favorable immigration policies.

A Broader Shift

The drop in H-1B visa approvals isn’t just affecting Indian IT companies; it reflects larger trends in workforce strategies and immigration policies around the world:

Shift to Local Hiring: Companies in various sectors are focusing more on hiring locally rather than sending employees abroad.

Stricter Immigration Policies: Across the globe, governments are tightening their immigration policies to safeguard local jobs.

Rise of Remote Work: The COVID-19 pandemic sped up the adoption of remote work, reducing the need for physical relocations.

Looking Forward

The future of H-1B visa approvals for Indian IT firms remains unclear. It largely depends on the results of the upcoming U.S. presidential elections and any subsequent policy changes. However, one thing is certain: these companies will need to keep refining their strategies to stay competitive in our ever-changing world.

Increased challenges might be on the horizon, but so are opportunities for growth and innovation in India’s domestic market. By focusing on digital transformation, upskilling their workforce, and leveraging remote work, Indian IT companies can manage this period of uncertainty while retaining their leadership in the global tech industry.

In sum, the dramatic decline in H-1B visa approvals highlights the urgent need for Indian IT companies like TCS, Infosys, and Wipro to stay flexible and enduring. As they find their way forward, these companies will be vital in shaping the future of global technology services amid changing political scenes and workforce trends.

For more information regarding H-1B visas, you can visit the official USCIS H-1B Visa page. Moreover, VisaVerge.com has reported that the changing policies and economic factors play a substantial role in shaping the future strategies of Indian IT businesses.

Learn Today

H-1B Visa: A non-immigrant visa allowing U.S. companies to employ foreign workers in specialty occupations.
Fiscal Year: A one-year period used by governments and businesses for accounting and financial reporting purposes.
Green Card: An identity card authorizing foreigners to live and work permanently in the United States.
Remote Work: A work arrangement where employees perform job duties outside a traditional office environment, often from home.
Digital Transformation: The integration of digital technology into all business areas, fundamentally changing how organizations operate and deliver value.

This Article in a Nutshell

The fiscal year 2024 has reshaped the H-1B visa landscape, presenting Indian IT giants like TCS and Infosys with approval declines. Driven by tighter U.S. policies, cost-cutting, and rising American competition, these firms pivot towards remote work and local hiring. Strategic adaptation now defines their future success.
— By VisaVerge.com