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LABOR & EMPLOYMENT LAW — 03/17/09

H1-B workers laid off by Microsoft, but US workers took biggest hit

Microsoft Corporation confirmed that H-1B and other temporary visa holders were among those laid off beginning January 2009 as part of the multinational computer technology corporation’s announcement that it would eliminate up to 5,000 jobs over the next 18 months, but the corporation’s general counsel, Brad Smith, confirmed that the “majority of Microsoft’s workforce is made up of US workers, and therefore[,] the majority of jobs eliminated in January were held by US workers.” In a March 3, 2009, letter to Senator Chuck Grassley (R-Iowa), Smith said: “Workers on H-1B visas and other temporary work visas make up only a small percentage of our overall workforce, but they were also among the employees impacted by the reductions announced in January.” Smith’s letter can be found at: http://microsoftontheissues.com/
cs/blogs/mscorp/archive/2009/03/03/microsoft-responds-to-senator-grassley.aspx. In writing the letter, Smith underscored that Microsoft was in “rigorous...compliance with the requirements of the H-1B program.”

Background. When Microsoft announced the first major layoff in the corporation’s history in January 2009, Senator Grassley wrote a letter to Microsoft CEO Steve Ballmer asking for a breakdown in the number of the jobs that were being eliminated, concerned that Microsoft would be retaining foreign guestworkers rather than similarly qualified American employees when it began implementing its layoff plan “It is imperative that in implementing its layoff plan, Microsoft ensures that American workers have priority in keeping their jobs over foreign workers on visa programs,” said Grassley. The senator’s letter can be found at: http://grassley.senate.gov/news/Article.cfm?customel_dataPageID_1502=18922.

H1-B visas are given to US companies seeking to hire nonimmigrant aliens in specialty occupations of distinguished merit and ability when such workers are in limited quantities in the United States. A specialty occupation requires the theoretical and practical application of a body of specialized knowledge and a bachelor’s degree or the equivalent in the specific specialty (e.g., sciences, medicine and health care, education, biotechnology and business specialties, etc). Holders of these visas can stay in the United States for up to six years, but there is an annual cap on H-1B visas of 65,000 workers per fiscal year. An additional 20,000 visas are available for foreign nationals who have graduated from a US college or university with a master’s degree or higher.

Microsoft, which has already laid off 1,400 employees in January (more than 800 of whom were in Washington state), confirmed that it actually expects to hire 2,000 to 3,000 individuals during the same period, meaning that the total net employee reduction may be no more than 2,000 jobs, not 5,000. The positions that will be eliminated include jobs in marketing, sales, finance, Legal and Corporate Affairs, HR and IT. As to whether the remaining laid off employees will be H-1B visa holders or have other work visas, Smith said “it’s too early to know the precise answers.” He did confirm that H1-B employees have always accounted for less than 15 percent of Microsoft’s US workforce, the level that is used in immigration law to determine whether a company is “H-1B dependent.”

Microsoft will continue recruiting at US college universities. Smith noted that Microsoft will continue its “recruiting for core technology jobs at US universities, which continue to be among the best in the world for computer science and engineering graduates.” However, he said that “as one recent study found, in 2005 temporary residents earned more than 40 percent of the engineering and computer science degrees at US higher education institutions. For doctoral degrees, that number was even higher, as temporary residents accounted for 59 percent of the degrees awarded in these fields that year.”

“The substantial majority of H-1B petitions filed by Microsoft are for core technology positions, and technology and engineering positions account for about 90 percent of Microsoft’s H-1B workforce,” said Smith. “Many of these H-1B employees have been seeking permanent resident status for many years and would no longer be dependent on their H-1B visas but for multi-year delays in the green card process.” Therefore, confirmed Smith, “with these factors taken together, we do not expect to see a significant change in the proportion of H-1B employees in our workforce following the job reductions.”

Smith also noted that the Microsoft recently announced Elevate America, a program which will provide technology training to two million people nationwide during the next three years, working closely with state and local governments.

USCIS will begin taking H-1B applications for the next fiscal year on April 1.

For more information on this and other topics, consult CCH Employment Practices Guide or CCH Labor Relations.

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