December 11, 2023

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Tech Layoffs Likely Pose No Deterrent to Record H-1B Visa Demand

4 min read

Employer demand for high-skilled foreign workers on temporary visas is expected to reach a new high for a third straight year even as waves of layoffs continue among major tech companies like Meta Platforms Inc., Google LLC, and Twitter Inc.

Companies can register to hire workers on H-1B specialty occupation visas during fiscal year 2024 via an online filing system beginning Wednesday. Immigration attorneys project that the number of registrations will grow again this year because the labor market remains strong for workers with technology skills.

US Citizenship and Immigration Services will hold a random lottery to reach the annual cap of 85,000 H-1B visas if it receives a sufficient number of registrations by mid-March. Employers selected through the lottery would be able to submit full petitions for the visas.

Since the introduction of the online registration process in 2020, employer submissions have surpassed that cap each year. Registrations jumped from roughly 274,000 in the online system’s first year to more than 483,000 last year.

That trend has been fueled by both the low barrier to entry—each registration costs employers just $10 and is simpler than completing a full petition—and the labor crunch for talent in key tech fields.

The limited number of visas available each year also means added demand in subsequent registration cycles as companies that lost out in prior years try their luck again.

“Employers are struggling to find the talent that they need,” said Noah Klug, an immigration attorney at Klug Law Firm PLLC. “That’s the reality.”

While some big-name companies have shed jobs—including H-1B visa holders—other types of businesses continue to seek workers with tech skills, said Anne Rowley, a senior associate at Fragomen, Del Rey, Bernsen & Loewy LLP.

“The layoffs that we’re seeing are centered on the tech industry,” she said. “That doesn’t mean that there aren’t industries still growing and in need of the skills we see so many foreign workers occupying.”

Labor Market Shuffle

H-1B visas, in high demand in tech, have a duration of three years with an option to extend for an additional three years. Visa holders can continue renewing their status if their employers are sponsoring them for an employment-based green card.

While it’s unclear exactly how many H-1B holders are among the recently laid off tech workers, thousands of job cuts across the industry mean many foreign workers will be scrambling to find new visa sponsors or else risk having to leave the country. With other companies picking up the pieces, demand for H-1B workers will remain strong, said Madeline Zavodny, a professor of economics at the University of North Florida.

“Whether it will be as strong as last year is going to be interesting to see,” she said. “I wouldn’t place a bet either way.”

Big tech firms that have announced plans to downsize are some of the biggest H-1B users, said Shev Dalal-Dheini, government relations director at the American Immigration Lawyers Association. But “there could be huge pent up demand from people who didn’t get numbers last year,” she said.

Continued growth in H-1B registrations despite mass layoffs undermines the idea that the demand is based on labor shortages, said Ron Hira, an associate professor of political science at Howard University.

“Taking a step back and looking at this from a high level view, you’d say this doesn’t compute,” he said. “It doesn’t have logic.”

Earlier Registrations

While big tech layoffs could give some midsize companies a chance to hire laid-off workers, most H-1B registrations by contrast are submitted on behalf of early career workers employed through Optional Practical Training, which allows student visa holders to work up to three years in science, technology, engineering, and math fields after graduating from a US college.

That means they’re already working in the US when their employers submit a visa registration.

The diminishing odds of securing an H-1B visa through the lottery process have led companies to start sponsoring workers earlier than ever, further adding to registration numbers, said Robert Webber, principal attorney at Webber Law Firm 2.0.

The post-pandemic job market churn also could encourage recent graduates employed at large tech companies to seek out multiple employers willing to sponsor them for a visa to protect against a job loss in the future, Webber said.

“If you work for Amazon in any other year except for this one or last year, you probably weren’t worried about layoffs,” he said. “If you work for Amazon now, you’re probably thinking, ‘OK, maybe it could happen.’”

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