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Microsoft Layoffs Kickstarts Major H-1B Debate

By - Source: Tom's Hardware US | B 17 comments

Recent layoff announcements within the IT sector have been all the buzz lately along with economic downturn, however Microsoft’s recent layoffs gained the attention Senator Charles Grassley (Iowa).

Grassley, in a letter directed to Microsoft CEO Steve Ballmer on January 22, 2009 wrote “Microsoft has a moral obligation to protect … American workers by putting them first during these difficult economic times,”. Grassley is a vocal critic of the H-1B program, and could have taken the time to send this type of communication to any of the other vendors in the IT industry or corporations with H-1B workers on staff for that matter. However, it could be that Bill Gates has called for an increase in the annual cap on visas during congressional hearings that caused Microsoft to be singled out and targeted by Grassley on the matter.

Microsoft currently has plans to cut back nearly 5,000 employees over the next 16 to 18 months, with a majority of the first 1,400 being foreign workers who are currently employed in the U.S. on visas. Microsoft has not been more specific beyond this, and despite Grassley’s communications to Ballmer, there are no federal laws that require companies to lay off H-1B holders before U.S. citizen workers. As a matter of fact, the laws are laid out to say that you have to treat H-1B based employees the same as any other. Something that Grassley appears to have acknowledged in his letter to Ballmer. Moral however does not always tie directly in with ‘legal’ all the time.

Microsoft has not disclosed exactly how many H-1B workers are currently on its payroll. It is believed that Microsoft is one of, if not the biggest, H-1B employers in the U.S. – According to USCIS data, Microsoft received an approval for nearly 2,300 visas for the 2006 and 2007 fiscal years.

Microsoft had released their response to Grassley’s letter, and noted that there is considerable ‘human impact’ for all workers who are laid off, which of course includes H-1B holders. When H-1B employees suffer a loss of employment they are technically no longer eligible to be in the U.S. Something that causes many problems beyond financial issues. Family’s have to pack up and relocate on very short notice. In practice though, new H-1B holders may have a grace period of up to 60 days, to aid in the process of locating new employment before being required to the leave the country. These people may also be eligible for a visitor’s visa, in the event that they can show sufficient funding to support themselves, according to immigration attorneys.

H-1B critics do not expect that Microsoft, or any other company for that matter, to exclusively let foreign guest workers go before letting Americans go, however they do see the ongoing layoffs lately as a clear rebuttal to the argument that more h-1B visas are needed to supplement the U.S. technical labor pool.

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  • 1 Hide
    Anonymous , February 4, 2009 4:46 PM
    US companies are morally obligated to keep US employees first, but whether their CFO's have the guts to do this instead of maximizing profit is the question.
    At the very least, any bailed out company should be required to get rid of H1B employees instead of US employees...
  • -1 Hide
    p05esto , February 4, 2009 4:57 PM
    agreed.
  • 0 Hide
    techtre2003 , February 4, 2009 5:38 PM
    If you have ever taken a business class the first thing you learn is ANY corporation, above all else, has a fiduciary responsibility to their shareholders to maximize profit. So when businesses seem greedy or not doing the moral thing; that's because they are following the "golden rule" of business.
    So is it right to keep foreign workers if it helps the bottom line? I think it's a tough question. If you look at the big piture and long term effect, the answer may be different as opposed to looking at the problem as short term. That's what the big whigs get paid big bucks to decide :) 
    I do agree with someken on the point if the company was bailed out, it should be required to maintain US employees before H1B employees.
  • 1 Hide
    SAL-e , February 4, 2009 5:43 PM
    Yes, If you look the issue only on the surface. How nice would be to let the H1B employees to go. But this will have very bad results for every one.
    I believe Microsoft and any other employer should keep the best employees no matter where they have come from. Other wise Microsoft and other US companies will become less competitive and If one of them fails many more US citizens will be unemployed.
    I believe this economic crisis is the best time for everyone to take good look. It is time US citizens to remember what really means to be US citizen. It means you have freedom and responsibility to ensure the best life for you self and others. As new (1st generation) US citizen I strongly believe in that. If I don't want to be replaced by H1B worker it is my responsibility to be the best in my field and provide the best service to my employer. That also miens to keep them responsible to do their job also. And the most important to ask our politicians why they forgot their job and responsibilities!
    Sorry, but letting H1B employees to go just because they are not US citizens would be very very bad for everyone. Wake up be an American.
  • 0 Hide
    Anonymous , February 4, 2009 5:54 PM
    A N T I - A M E R I C A N S...

    The H-1B and L-1 guest workers programs have “RESERVED” millions of high-value jobs for citizens of foreign countries.

    And, we have plenty of evidence that these “Fake Job Ads” consistently and routinely DENY, DEPRIVE and EXCLUDE United States Citizens from Equal Employment Opportunities.
    http://www.youtube.com/watch?v=_cNnK2M4OTs
    http://www.youtube.com/watch?v=TCbFEgFajGU
    http://www.numbersusa.com/index

    E-Verify Keeps Getting Delayed...
    http://www.cnn.com/video/?/video/politics/2009/01/31/wian.killing.everify.cnn

    Microsoft lobbied Obama transition team on high-skilled immigration weeks before announcing layoffs
    http://blog.seattletimes.nwsource.com/techtracks/2009/02/02/microsoft_asked_the_government_in.html

    Obama/Judd Gregg Abandoning the Middle Class
    http://www.cato.org/weekly/index.php?vid_id=64

    Alan Greenspan on Income Inequality
    http://www.youtube.com/watch?v=oqx88MyUSck

    Octopus
    http://www.youtube.com/watch?v=dxJJXVdxuvk

    Octopus Yacht in St. Lucia.
    http://www.youtube.com/watch?v=NdHTBCz3luQ

    Paul Allen's Yacht the Octopus.
    http://www.youtube.com/watch?v=VvLGWnh_8FU

    New- Inedito Video Yacht Octopus (microsoft)
    http://www.youtube.com/watch?v=PS3qtfJdaCU&feature=PlayList&p=FE3E579388C674D5&playnext=1&index=34

    Paul Allen's Motor Yacht Tatoosh
    http://www.youtube.com/watch?v=9LY-wCloSBU

    TATOOSH YACHT
    http://www.youtube.com/watch?v=7e4Y2LETpSM

    Fire Foreigners First
    Discussing Americans priority in job retention, with Rob Cox, Breakingviews.com U.S. editor
    http://www.cnbc.com/id/15840232?video=1019715332&play=1

    Fire Foreigners First?
    Should American companies lay off foreign workers first?
    Mark Krikorian, of the Center For Immigration Studies, and Stuart Anderson, of the National Foundation for American Policy, share their insight.
    http://www.cnbc.com/id/15840232?video=1019862800&play=1
  • 3 Hide
    chaohsiangchen , February 4, 2009 6:40 PM
    So, you're prefer to lay off H1B first than US citizens?

    Lay off H1B jobs that require Ph.D in OS kernel and memory model and not the US citizen on administrative positions? That makes sense?

    Lay off H1B jobs that require specialty in firmware/software interface and not the US citizen in marketing? That makes sense?

    Lay off award winning art designers on H1B instead of printer maintaining US citizen? That makes sense?

    Foreigners don't get hired to take jobs that require only ordinary skill, that's required by current US law. Employer who can't provide justification for H1B position cannot file for it. There aren't enough Americans willing to go through science/engineering schools and get master or Ph.D degree. Your higher institutions are flooded with Chinese and Indian graduate students who are willing to do more for less. These people form the bulk of H1B in the US.

    When bad time hits, the companies lay off less important and more replaceable jobs first, while maintaining their core business. That's why the companies lay off citizens before H1B, because the law and the labor supply put H1B in the core business. And those H1B hires aren't cheap either. They can go anywhere in the world and still get high payment, but they choose to stay in the US because the US companies offer them better deal. The US companies want to hire more American with degree, know-how and extraordinary talent, but that kind of people are in short supply world wide. The US is getting the upper hand in global talent trade, while China and India are losing talents in large number. And, yet, there are still people blaming company greed, which is their nature, for laying off Americans instead of H1B. The fact is that, if you the citizen has the same level of knowledge, skill and degree, chances are Chingchong the H1B is going to lose his job before you, because laying off an H1B has lower repercussion than laying off a US citizen.
  • 0 Hide
    Anonymous , February 4, 2009 7:57 PM
    Guys...you have enjoy everything you can and careless to others while the economic is at its goldern age.....suddenly things got changed and now you are trying to get rid of services and contribution others has been provided to you all the time...is this fair? It is no matter who they are, we should keeping only the bast. I have been seeing my co working doing nothing all day long just because he got a way to sweet talk the boss and still being hire and not contribute to the company. However, another guy from UK got paid the same but has to do more work...so what's the deal here? I think company should keep those contribute more and best skill. (of course, not to the extend of greedy bottom line cook up). Why not asking who is the one causing the financial crisis now? That's us~~ which we also causing other countries to lost their jobs. If the UK guy got layoff, he then went back to UK and can't find a job there..obviously we just put another problem to other countries again...
  • 1 Hide
    veryed , February 4, 2009 8:09 PM
    Quote:
    If you have ever taken a business class the first thing you learn is ANY corporation, above all else, has a fiduciary responsibility to their shareholders to maximize profit.


    That is so true and I feel like it is one of the things that is most wrong with the current business environment. Until businesses shift their responsibility back to their consumers and employees, things will just keep getting worse here.
  • 0 Hide
    blackbeastofaaaaagh , February 5, 2009 12:15 AM
    It seems to me that those endorsing protectionism have little understanding that we are now living in a global economy. When most companies lay off a small percentage of people, they are letting go of the people who perform below average or who have not kept their skill sets up to date.

    Skilled and motivated workers are a valuable asset to any country's economy. To train them, costs their home countries enormous sums of money. That is money that we didn't have to spend training qualified people. If we deny them work visas, they will simply take their skills to some other country and their industries will then be in a better position than our own. Also, contrary to popular belief, H1 visa holders don't work for peanuts.

    Remember when Reagan imposed big tarrifs on foreign steel to help our domestic producers. The unintended side affect was that it hammered our local car industries who then had to pay more for raw materials.

    So we have a choice to make. Either we live in our own shell like the Chinese empire did and watch the world leave us technologically and economically in the dust or we learn to compete in the world.
  • 1 Hide
    jkflipflop98 , February 5, 2009 12:44 AM
    blackbeastofaaaaaghIt seems to me that those endorsing protectionism have little understanding that we are now living in a global economy. When most companies lay off a small percentage of people, they are letting go of the people who perform below average or who have not kept their skill sets up to date.Skilled and motivated workers are a valuable asset to any country's economy. To train them, costs their home countries enormous sums of money. That is money that we didn't have to spend training qualified people. If we deny them work visas, they will simply take their skills to some other country and their industries will then be in a better position than our own. Also, contrary to popular belief, H1 visa holders don't work for peanuts.Remember when Reagan imposed big tarrifs on foreign steel to help our domestic producers. The unintended side affect was that it hammered our local car industries who then had to pay more for raw materials.So we have a choice to make. Either we live in our own shell like the Chinese empire did and watch the world leave us technologically and economically in the dust or we learn to compete in the world.


    It sounds to me like you're a little out of touch in how a big business really works.
    Most big, big companies don't really care who is getting the axe, they simply look at the compensation package you are getting next to the guys around you. If you're a certain percentage above the bell curve, you're gone - unless you're a "superstar" that everyone in the company knows and likes. There's no personification. You are simply a number.

    And, incase you hadn't noticed, the chinese pretty much own America now, maybe there's something to that whole "living in a shell" thing.
  • 1 Hide
    Christopher1 , February 5, 2009 8:27 AM
    somekenUS companies are morally obligated to keep US employees first, but whether their CFO's have the guts to do this instead of maximizing profit is the question.At the very least, any bailed out company should be required to get rid of H1B employees instead of US employees...


    Unfortunately, even as a very pro-immigration person, I have to agree. American workers come before H-1B workers, by a large degree. Microsoft and other companies need to be told that.
  • 1 Hide
    ThePatriot , February 5, 2009 2:54 PM
    H1B workers fill positions that us citizens can't....for whatever reason: be it lack of education, talent or lack of other skills.

    Protectionism will backfire in your face... some ppl can't figure that out by them selves, (hence there are H1B workers).
  • 0 Hide
    kneelicks , February 5, 2009 8:19 PM
    ThePatriotH1B workers fill positions that us citizens can't....for whatever reason: be it lack of education, talent or lack of other skills.Protectionism will backfire in your face... some ppl can't figure that out by them selves, (hence there are H1B workers).


    You've obviously never worked for a LARGE corporation. In the vast majority of cases the H1B workers are almost trainees. The current employees train the newcomers, then the US staff are let go.

    The only 'skill' that the majority of H1B visa employees have over US employees is that they'll work for lower wages.

    Why not increase the cost of the H1B visa to $50k a year, then see how many H1B's applicants really have a superior skill set.

    ps - By the way in the 80's I was an H1B employee. I did have a superior skill set, but upon arriving in the US I found I was been paid about half of what a US citizen was making. So it's not the skill set that counts - its the pay grade.
  • 0 Hide
    blackbeastofaaaaagh , February 5, 2009 9:29 PM
    jkflipflop98It sounds to me like you're a little out of touch in how a big business really works. Most big, big companies don't really care who is getting the axe, they simply look at the compensation package you are getting next to the guys around you. If you're a certain percentage above the bell curve, you're gone - unless you're a "superstar" that everyone in the company knows and likes. There's no personification. You are simply a number.And, incase you hadn't noticed, the chinese pretty much own America now, maybe there's something to that whole "living in a shell" thing.


    I am not sure which large corporations you are talking about. I was not talking about has-been companies dying a slow death due to corruption, favoritism, racism, or nepotism or those that rely on un-skilled labor. We are talking about companies like Microsoft here.

    Yes, big corporations do treat people like numbers, or shall I say, a large set of numbers. The key is to successfully process those numbers and figure out who should stay. It is the goal of any company to have good people. Technology companies don't last if they fire people simply because they make above avarage salary. Of course if you are getting a very good package the company will want to see that what you bring to the company justifies your pay.

    I have worked for several large corporations and have seen many lay-offs. I have rarely witnessed talented people being let go simply because they make too much salary or have too much seniority (unless that person made an enemy out of higher management). 90% of people being let go are under the bell curve in performance.

    >And, incase you hadn't noticed, the chinese pretty much own America now, maybe there's something to that whole "living in a shell" thing.

    That is exactly my point. The Chinese learned from their past mistakes. You should instead blame our leaders for caving in to big domestic businesses lobbying them to go easy on the Chinese who play with a different set of rules. China has strict limits on what foreigners can own in their country; whether it be businesses, property or natural resources. That is why they can confidently undervalue their currency and not fear foreigners coming in and buying them out. Remember when the US tried to devalue the dollar in the 80s? The Japanese rushed in and started buying up assets left and right. The politicians panicked and backed raised the dollar back up.
  • 0 Hide
    kneelicks , February 6, 2009 2:51 AM
    blackbeastofaaaaaghI am not sure which large corporations you are talking about. I was not talking about has-been companies dying a slow death due to corruption, favoritism, racism, or nepotism or those that rely on un-skilled labor. We are talking about companies like Microsoft here.Yes, big corporations do treat people like numbers, or shall I say, a large set of numbers. The key is to successfully process those numbers and figure out who should stay. It is the goal of any company to have good people. Technology companies don't last if they fire people simply because they make above avarage salary. Of course if you are getting a very good package the company will want to see that what you bring to the company justifies your pay.I have worked for several large corporations and have seen many lay-offs. I have rarely witnessed talented people being let go simply because they make too much salary or have too much seniority (unless that person made an enemy out of higher management). 90% of people being let go are under the bell curve in performance.>And, incase you hadn't noticed, the chinese pretty much own America now, maybe there's something to that whole "living in a shell" thing.That is exactly my point. The Chinese learned from their past mistakes. You should instead blame our leaders for caving in to big domestic businesses lobbying them to go easy on the Chinese who play with a different set of rules. China has strict limits on what foreigners can own in their country; whether it be businesses, property or natural resources. That is why they can confidently undervalue their currency and not fear foreigners coming in and buying them out. Remember when the US tried to devalue the dollar in the 80s? The Japanese rushed in and started buying up assets left and right. The politicians panicked and backed raised the dollar back up.

    I don't want to say which company I currently work for, but lets say they have 250k employees in the US, they employ 30k in India and their annual DP budget is 9 BILLION. (yes BILLION - thinks lots of ATM machines) and any development has to be done off-shore where their total cost is $17 an hour
  • 0 Hide
    blackbeastofaaaaagh , February 6, 2009 3:52 AM
    I can tell you that GOOD talent in India is not that easy to come by. US businesses have learned this a while ago. They may have once been pain $17/hour but not any more. I know many talented Indian colleages who opted to go back to India because the pay there was as good or better than the $60 an hour they got here (the dollar gets you much farther there). Being a US citizen, hence having a good knowledge of US culture, business practices and expectations I get offers to come work in India all the time, through former/current colleages, with a pay that matches or beats what I get here. However, I am reluctant since the US is the only home I've ever know (outside of a couple of years of childhood in Europe).

    Whenever there is an imbalance in pay, an equilibrium has to be reached in an open market and I suspect we are already reaching that point. If someone in India is being paid $17 an hour it is because that is exactly what their work is worth (by the time we have to fix all the bugs and errors). People in the US who can do more than just simple grunt source coding and web developement have nothing to fear from outsourcing. During the dot-com boom so many bozos entered the IT sector who had no clue about proper programming methodology or lacked B.S. degrees in engineering or computer science. Unfortunately many are still in the system and have never bothered to improve themselves. They are the ones who are usually let go.

  • 0 Hide
    latentid , February 24, 2009 3:56 AM
    Hi,
    Some of these jobs require excellent math and analytical skills. By hiring an American Citizen, in many cases, you are compromising the technical advancement that is otherwise possible. A majority of American graduates are poor in math and science (this is a well-known fact borne out by recent articles about the performance of US kids in science/math exams). Americans should learn to compete in a global environment involving other nations rather than whining about it.
    Cheers,