Microsoft Layoffs Kickstarts Major H-1B Debate

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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  • 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...
  • p05esto
  • techtre2003
    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.