Tech Employers Lay Off Workers, but Get New Rounds of H-1Bs

You might think that employers that laid off large numbers of their tech workers would not be able to bring in more foreign workers in the H-1B program.

You would be wrong.

If employers shed hundreds or thousands of their workers, thus indicating that they are not facing a worker shortage, how can they bring in more workers from overseas? The answer is that the immigration system simply ignores the layoffs as it allocates H-1B workers. It pays attention only to the numbers requested by industry.

OK, let’s ignore the pro-employer tilt of DHS (and the immigration law) for the moment and ask another question: Why would an employer want more H-1B (tech-related) workers when it is shedding similar workers? What’s the point?

The employers’ motivation is simple. The laying-off of some workers while hiring some new ones makes a certain Darwinian sense. The employers get rid of the less productive workers (or those in the less productive parts of the company) and hire a fresh batch of alien workers who they expect to be either more productive, or more docile and less expensive, than those laid off. The new ones are also younger than those laid off. That tens of thousands of citizen and green-card workers are discarded in the process is something they do not discuss.

As the year progresses, the extent to which this is happening is decreasing according to one institutional observer of the process, TechCrunch+:

Nevertheless, recent newspapers are carrying news about layoffs at the music site Spotify, an H-1B user. It cut 1,500 jobs and the news of the layoffs boosted its share price the day after the announcement by 7 percent. According to myvisajobs, it was awarded 188 pre-lottery H-1B slots this year, meaning that it actually got to hire about one-third of that figure, or about 63 new alien workers.

Meanwhile, here are the four tech firms with the most layoffs in 2023 and the H-1B slots they obtained:

One of the byproducts of all this coming and going of the tech labor force allowed by the current H-1B policy is, of course, anxiety for the workers involved.

Another is that USCIS feels a need to run additional H-1B lotteries because something on the order of 50 percent of the new H-1B slots awarded are rejected by the would-be employers, as we have previously reported.

So, workers suffer and the government has to go to extra expense, but management is pleased and in some cases, stock values increase. It is ever thus.