US cos expect fewer worker visas amid downturn

WASHINGTON, March 30 (Reuters) - The annual flood of applications for visas for highly skilled workers is expected to ease this year, though companies say they will still push to eliminate a cap on the number awarded by the government.

Immigration officials have been overwhelmed in recent years for applications for so-called H-1B visas, which let U.S. companies employ foreign guest workers in highly specialized jobs for three years.

The U.S. Citizenship and Immigration Services begins accepting applications for 2010, with a cap of 65,000, on Wednesday. In recent years the number of applications has reached that ceiling within days.

But this year, amid the most dire economic recession in decades and major layoffs at companies including International Business Machines Corp IBM.N and Microsoft Corp MSFT.O, the industry expects more a stream than a flood.

"We certainly don't expect to see the same number of applications that we've seen in the past," said Robert Hoffman, a vice president at Oracle Corp ORCL.O. "In this economic environment we don't expect to hit the cap on the first day," as has happened in the past.

Hoffman is co-chairman of Compete America, a coalition of tech companies including Oracle, Microsoft and Intel Corp INTC.O that for years has lobbied for the right to employ foreigners freely.

Senator Charles Grassley, an Iowa Republican, has criticized Microsoft, which announced 5,000 layoffs earlier this year, for not explicitly committing to preserve U.S. jobs over those of foreigners.

Last week, sources told Reuters that IBM would cut about 5,000 jobs in the U.S., adding to similarly large cuts in the past few months.

“Moving jobs overseas is becoming all too common of a practice and it’s especially demoralizing when U.S. employees being laid off have to train their overseas replacements,” Grassley said of IBM’s plans.

Grassley, with Sen. Richard Durbin, an Illinois Democrat, is expected to introduce a bill again this year to require that companies pledge to make a good-faith effort to hire Americans for a job, before they seek a visa for it.

As it stands now, only companies that employ a certain threshold of foreign workers have to attest that they made such efforts.


Some unions and other critics have argued that hiring foreign workers allows companies to pay cheaper wages, depressing all workers’ pay.

The Institute of Electrical and Electronics Engineers-USA, which represents 215,000 engineers, scientists and other professionals, backs more stringent requirements on employers to recruit U.S. workers first.

“The fundamental laws of supply and demand are operative; if you increase the supply of labor in relation to demand, the demand-side pressure to increase wages goes down and actual wages may even decline,” said Gordon Day, president of the IEEE-USA.

Despite expectations for fewer visa applications and amid national unemployment of more than 8 percent, the shortage of skilled workers persists, company groups said.

They say the cap, enacted by Congress in 1990, is outdated and should be based on market conditions.

Companies say if they could find qualified U.S. workers, they would hire them, especially since they have to pay an average $6,000 per worker for each visa.

“To go after an H-1B for a company is a time consuming process. The assumption that a company doesn’t want an American worker is simply just not true,” said Heath Weems, a policy expert at the National Association of Manufacturers.

He said there is a mismatch between the layoffs and the needs of employers.

“Just because people are are laid off doesn’t necessarily mean that is what (companies) need,” Weems said.

Reoprting by Kim Dixon; Editing Bernard Orr