Tech Giants Use Indian Contractors to Help Outsource Jobs Behind Closed Doors


Transparency of the H-1B Visa Program Called into Question 

Some of the biggest names in tech, like Cisco Systems, Inc. (NASDAQ:CSCO) and Microsoft Corporation (NASDAQ:MSFT), use intermediaries to help mask how many workers they’re bringing in from India, deflating their H-1B visa application numbers as far as the public is concerned.

Cisco was the worst offender, having applied for 3,000 H-1B visa in the fiscal year of 2016 to fill its San Jose headquarters, offering many prestigious six-figure salaries. But behind the scenes, those 3,000 applications only made up about 40% of the total H-1B visa applications the company filed, with the rest being run through roughly 250 outsourced companies. (Source: “The Secret Way Silicon Valley Uses the H-1B Program,” Bloomberg, June 6, 2017.)

The Labor Department does not include employer addresses when gathering its statistics, so it could not accurately report the real number of visa applications filed by Cisco, leaving the public in the dark.

The H-1B visa —a foreign work permit for non-U.S. citizens to work and live in the country for as many as three years—has come under fire from the administration of President Donald Trump. Trump has criticized the program both on how he believes it harms American jobs as well as on how it poses a security concern regarding immigration.


“Like many large companies, Cisco works with contracting firms to place high skilled workers on a contract basis,” Cisco wrote in a statement. “While we believe that it is critical to ensure that high skilled workers are able to come to the U.S. to work and innovate, the vast majority of our contingent workforce are U.S. citizens and permanent residents. In a highly competitive market for talent, Cisco is committed to fair pay in accordance with the market and without regard to immigration status.” (Source: Ibid.)

Cisco is hardly alone among tech companies using third parties to downplay the number of visa applications. Paypal Holdings Inc (NASDAQ:PYPL) had contractors submit about half of its overall applications, while Microsoft had 43% of its H-1B Visa forms run through contractors. eBay Inc (NASDAQ:EBAY) had 29% and Google had roughly 25%.

Facebook Inc (NASDAQ:FB) fared far better at 12% of its applications running through contractors, while Apple and Amazon apparently did not use them at all.

The crux of the issue here lies at the heart of what the H-1B visa is set to accomplish. While some Silicon Valley insiders lament the new restrictions being placed on the permit, others praise the changes as a necessary step to protect American jobs from outsourcing.