JPMorgan Says $100K 'Prices Out H-1B' as Indian IT Giants May Accelerate Offshoring With Remote Delivery Already Proven at Scale (indiadispatch.com)
- Reference: 0179459970
- News link: https://news.slashdot.org/story/25/09/22/1329201/jpmorgan-says-100k-prices-out-h-1b-as-indian-it-giants-may-accelerate-offshoring-with-remote-delivery-already-proven-at-scale
- Source link: https://indiadispatch.com/p/100-000-dollar-visa-india
Major Indian IT firms derive only 0.2% to 2.2% of their workforce from H-1B approvals after years of reducing visa dependence, according to India Dispatch. New approvals alone account for under 0.4% of headcount. Morgan Stanley estimates companies could offset 60% of the financial impact through increased offshoring and selective price increases. The net damage to operating profit would stay contained at around 50 basis points or a 3% to 4% hit to earnings spread across the renewal cycle. Companies plan to accelerate geographic arbitrage by [3]routing more work to India, Canada, and Latin America . Firms can maintain their existing visa holder base while letting normal turnover occur over three to six years.
[1] https://news.slashdot.org/story/25/09/19/2020241/president-to-impose-100000-fee-for-h-1b-worker-visas-white-house-says
[2] https://indiadispatch.com/p/100-000-dollar-visa-india
[3] https://indiadispatch.com/p/100-000-dollar-visa-india
Where do Indian firms offshore to? (Score:4, Funny)
North Korea?
Re: (Score:1)
> North Korea?
Why not, [1]everyone else is. [justice.gov]
[1] https://www.justice.gov/opa/pr/arizona-woman-sentenced-17m-information-technology-worker-fraud-scheme-generated-revenue
JPMorgan Says $100K 'Prices Out H-1B' (Score:3)
The current model prices out US IT workers. Oh well, I turn 70 on Saturday and I figure to have my last remaining business client migrated to a new provider by the end of the year.
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> The current model prices out US IT workers.
No, it doesn't.
> Oh well, I turn 70 on Saturday and I figure to have my last remaining business client migrated to a new provider by the end of the year.
I'm glad you got to damage the system before you left it.
The H1B's are the facilitators for offshore (Score:5, Interesting)
When I last dealt with these contracting firms, and when the model was at its worst for us, we would have a few full time employees scoping and drafting up the project. There would be an onshore contracting lead, an offshore contracting lead, and then the offshore team.
Those multiple layers allowed them to jack up the charges, insist they needed more contractors on each project, and hide the quality of the contractors we were given. I was extremely confident we were getting very low quality engineers with barely any experience and the majority of the actual work was being done by that offshore lead. Unfortunately we were being driven to push more and more work to contractors at that time until it all blew up and they reversed course bringing everything back in house.
We do have an offshore captive presence today but they are all full time employees now, not contractors. We also have better alignment where my quality of life isn't suffering because of having to do early AM and late PM calls with offshore.
Jacking up the price of H1B's will impact that onshore/offshore contracting lead model which will make the costs less desirable to companies and potentially removing their ability to field the onshore leads who mask what is really happening offshore.
I think for any company that truly is using H1B's to bring in talented workers who they want to employ it will encourage them to sponsor green card applications with a higher frequency rather than using the H1B model to keep workers as indentured servants. I'm good with that because someone coming in on a green card has the option to compete in the market and receive market rates. It may even cause companies to consider going back to hiring local talent and *gasp* actually doing career development.
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> It may even cause companies to consider going back to hiring local talent and *gasp* actually doing career development.
One can only hope.
Where is the break point? (Score:3)
They say it will price them out, but that depends on the break point. The reason they like H-1Bs is they can get workers who will work for less and work more hours because they are trapped in the H-1B structure and are terrified to lose their job, because then they will be deported. So if they truly make $15-20k in profit for the company, will changing to a US based worker who likely will want a higher salary and not work crazy hours be worth it? My guess is they just lock in the H-1Bs for more years and pay them less to keep their profits up. Or they try outsourcing straight to India again and skip bringing them to the US at all.
Re: (Score:2)
H1-B workers do not work for less.
You are, however, correct that the stipulations that come with an H1-B that lead to revoking the Visa is akin to indentured servitude.
Ultimately- pricing out the imported help is not going to change the fact that the US doesn't have what companies need. They're just going to outsource it.
The IT industry is full of shit. (Score:1)
American companies, once proud of being red white and blue and boasting how many jobs they were creating, are now “global companies” that celebrate headcount reduction in the US.. They used to extol the virtues of working in the US and attracting world talent. Then the offshoring began. My Fortune 500 company, like the rest, silently pushes management to move as maAmerican companies, once proud of being red, white, and blue and boasting about how many jobs they were creating, are now “g
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> American companies, once proud of being red white and blue and boasting how many jobs they were creating, are now “global companies” that celebrate headcount reduction in the US..
When shoud that have been? I am in the field since about 30 years, and I can't remember those alleged days.
Less is more (Score:2)
Less bodies here means less wear on our infrastructure, less demand for local resources, more housing for others, etc. If we aren't going to have the jobs anyway...
And to repeat an idea: It shouldn't be a fixed "fee" but rather a multiplier that's connected to the average American salary, or similar. That way, it never needs to be politically revisited.
Impacts on India (Score:4, Informative)
If this Trump directive goes through (and it's not clear that this isn't yet another TACO move), there are several significant impacts due India.
First, Indians in the US send around $35 billion in remittances to India. That's enough to be a few percentage points of the entire Indian GDP.
Second, the possibility of being sent to the US on an H1B is an enticement for Indian workers in the Indian contracting companies. If work gets send to India as a replacement for importing H1B workers, does that impact the quality of workers that the Indian contracting companies can attract? We're talking about 60,000 Indians sent to the US every year. That's not a small chance of being able to immigrate to the US.
Let's do H-2B visas next (Score:3)
H-2B visas allow companies to bring in foreign workers for non-agricultural purposes, such as waiters/waitresses, hotel desk clerks, housekeeping staff, servers, cooks, etc.
Let's impose a $100,000 fee for those visas as well so Americans can get those jobs.
Oh right. These are the visas Trump uses to avoid hiring Amerians at his failing golf clubs and hotels. Just like he [1]knowingly hired illegals at his failing golf club [axios.com].
[1] https://www.axios.com/2019/02/08/trump-organization-illegal-immigrants
Re: (Score:2)
Those are all "second-job" jobs, jobs you take because your primary job isn't bringing home enough cured pig; so they aren't going to do much for the American worker except keep him/her from pulling out the pitchforks and the torches. And as you mentioned, el Bunko needs those for his resorts and other crap he's into.
Global (Score:2)
We are a GLOBAL economy that is based on information. Call it Post Industrial. Information moves at the speed of light.
Pretending we Americans live in a giant castle surrounded by a huge Moat (aka Oceans) isn't going to protect us from what is happening elsewhere. Offshoring is going to kill our economy.
We have a dying generation who still sees the economy as post WWII, because that is the world we grew up in (Last of the boomers here).
We had better get used to it. Build things better, faster, cheaper.
Re: (Score:3)
Plus, the U.S. cannot produce all that it needs, manufacturing-wise. And the U.S. does not have enough people to even bother trying. Except that la Presidenta seems hell bent on trying no matter what the bad consequences. He thinks he can sell anything. So he's axing all the gov. reporting mechanisms that can report bad outcomes. And he's constantly uttering stupid things about how great the economy is.
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We also know information obeys the laws of entropy. fundamentally it wants to be defuse.
We do not live in an economy based on information. We live in an economy based on secrecy and superior knowledge and technical capabilities. It worked great back in the 60s when the Chinese did not have the technology to do a lot of precision manufacturing at scale.
We got cherry pick the high value, low input cost commercial activities - a science and tech dividend. They have caught up now, partly because we believed
Trump can waive the fees (Score:3)
That's the dirty Little secret nobody is talking about the president, AKA trump, can waive the fees at will.
There's a bunch of H-1B stuff in my feed that comes from the pro H1B side because I searched for it and once you search for something Google doesn't understand so just gives you whatever.
The pro H1B side has already calmed down and they're no longer worried. This doesn't apply to existing H-1B recipients and Trump can waive the fees.
This is just Trump soliciting bribes again and putting himself in a position where he can exert pressure to get late night talk show hosts taken off the air.
It's not going to have any effect on your job prospects. Once again Trump is not your friend Trump is Trump's friend
If companies are bringing people over (Score:2)
It's because they need them here. The cost of living and therefore wages paid in India are a fraction of what they pay here.
Just like it didn't work with Hitler appeasement doesn't work with your boss or with mega corporations.
Re: (Score:2)
if you said at a lower salary than what an american would make, I'd agree. It was never about talent and always about lower wages
I hope the EU does the same (Score:2)
Maybe one day soon I won't have to listen to crap support I have no idea what they talk about due to an impossible accent to understand.
You are all missing the point (Score:3)
" (c) The restriction imposed pursuant to subsections (a) and (b) of this section shall not apply to any individual alien, all aliens working for a company, or all aliens working in an industry, if the Secretary of Homeland Security determines, in the Secretaryâ(TM)s discretion, that the hiring of such aliens to be employed as H-1B specialty occupation workers is in the national interest and does not pose a threat to the security or welfare of the United States."
Contribute to Trump or promote Trump and your company gets a waiver. "national interest" means "Trump's interest".
This is just more corruption, using a clear 1st amendment violation to enforce it.
Return to office (Score:5, Insightful)
I thought it was impossible for companies to handle their workers not sitting in their local office together with their team?
Will they suddenly find out how to do video calls when they have to pay a little fee?
Re: (Score:3)
No, no, you see, productive work only happens in an office building, and they'll rent a local office in India, so somehow that magically makes the Microsoft Teams call more productive or something.
Re:Return to office (Score:4)
The reason they need employees to be in an office building is so they can have some kind of pit boss (usually an HR person sitting at a desk nearby) to make sure the employees aren't on a beach while pretending to work or having multiple jobs with multiple employers.
What employers realised during the lockdowns is that the office building doesn't have to be in the same country, and they don't really need in-person contact or team building exercises/retreats. So offshoring it is.
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Right, you're supposed to pretend to work at your desk, as God theirself intended.
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No. They probably don't want to hear the Roosters crowing in the background when employees are working from home on a Teams call and figure that since livestock isn't allowed in the office they can avoid that type of interruption.
And no. This isn't a joke. I've had at least three calls like this from Xerox Support over the past 5 years when their support site would crash and I had to call them for toner and parts support. To be fair I always got the parts and support on time so Kudos on Xerox but its defini
Re: Return to office (Score:2)
They masters and 15/hr
Re:Return to office (Score:5, Insightful)
They will accept higher costs due to delays and the like with offshoring, if those costs are less than paying the visa fees.
They will abandon paying Americans to do some of the work, and outsource all of it.
The reason this kind of scheme doesn't work is because the costs are different for every company. Some will pay it, some will do more offshoring, and a small number will employ more Americans. The only question is what the proportions will be, and which option your employer chooses. Hope you are in the last group.
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Adding to that - some companies will post US employees in India to match the timezone. It is almost certain that many software and IT jobs will be lost in the USA because of this.
What a win for India and other offshore IT hubs!
Re: (Score:2)
> The reason this kind of scheme doesn't work is because the costs are different for every company. Some will pay it, some will do more offshoring, and a small number will employ more Americans.
Nice hand wave there. That is called public policy, in a free society. Like you say it is about what the proportions will be. You don't know the policy won't achieve its goals, of employing more Americans in net, you are just assuming that part because you don't like the current leadership and not for any informed reason.
The real questions if this is more to little to late, and it might be. Even so trying something is better than doing more nothing. At the end of the day what difference does it make if y
Re: (Score:2)
> Of course the administration is looking at taxing some foreign employment as labor imports as well. So it is likely that this is one of a multiple prong approach to a broader protectionist strategy for American knowledge workers. I just hope the current bunch can stay in office long enough to implement it all.
That is the key point here. If one assumes this is a stand-alone policy they may be correct that it will fail, and in any case it may, but it is different than past policy which we know didn't work well for US labor. Further, this administration (whether one loves them or hates them,) is clearly using complex policy on almost every front. Again, I don't know if any of it will work and may not simply because of its cross-dependencies, but what we were doing before wasn't sustainable, so I'm game for a new
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As somebody who's telecommuted in different scenarios in the past, the best experiences I had was a few days in the office and the rest from home each week. The days from the office I interacted with coworkers and the socialization helped build the team. The days from home let me focus on getting the work done. A period of time away from the office can also be nice. I was able backpack in Spain and Portugal because the time differences allowed it.
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This might work if the people from your team are in the same office building. But if your team is spread via several locations, the benefit of being in the office is starkly reduced.
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I worked for a company which outsourced a lot of work to an Indian company. Some of them were on our site (in a separate office, a couple of miles from where I was working then) and some more were in India. It worked by and large, and I only ever actually saw most of the "local" Indians two or three times over all the years I worked there.
As for people "working from home", that often meant they could not be reached at all, or the background noises made it clear they were walking the dog.
Re: (Score:3)
Even if you assume full RTO (which won't happen), at $100,000 per H1-B, you're only going to need a reasonably low number of people in the team to setup a remote office for the entire team and ship a manager out there to oversee them - or just outsource that role too.
Fairly obviously, this almost certainly won't result in many thousands of H1-Bs each paying $100k to the US government each year; it'll result in many thousands of jobs that would have been paying US taxes on their wages, and then paying for