Top 5 Indian IT companies have less than 50% dependency on H-1B visas

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IT services majors and the largest employers in the country, including Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro and Tech Mahindra, said they have 20 percent to less than 50 percent dependency on H-1B visas to deploy workforce in their core market, North America.

H-1B visas are non-immigrant visas that allow US companies to employ foreign workers in speciality occupations such as science, technology, engineering, mathematics (STEM), and IT.

This comes at a time when there’s widespread commotion resulting in policy uncertainty over visas, particularly H-1B visas, in IT companies’ largest revenue-generating geography. The newly sworn-in President, Donald Trump, has changed his stance on immigration policies multiple times throughout his last tenure and in the run-up to the elections.

Most recently, Trump passed an executive order which said automatic US citizenship by birth will be granted only to children who have at least one parent as a US citizen or is a legal permanent resident, or a member of the US military.

For now, a federal judge in Seattle has temporarily blocked Trump's attempt to end birthright citizenship in the US.

Interestingly, Indian-origin companies like Infosys and TCS were major players in the H-1B visa sponsorship space, securing nearly 20 percent of the total approved visas in 2024, according to data sourced from staffing firm TeamLease Digital.

The country’s largest software exporter TCS, which gets nearly 50 percent of its revenue from North America, has more than 50 percent of its US workforce hired locally, TCS CEO and MD K Krithivasan had told Moneycontrol.

Krithivasan had said he was not worried about the possible changes in H-1B visa parameters under the new Trump administration as the company has been “less and less dependent on H-1B visas over the years.”

“In any given year, we get about 3,000 to 4,000 H-1B visas. In our overall scheme of things, it's a small number. If there is a decrease in H-1B, we can compensate with other means, or we can move the work to India,” he said.

Infosys too said that it has significantly reduced its reliance on H-1B visas, as over 60 percent of its workforce in the US are now locals.

"Our dependence on H-1B visas has reduced significantly. First and foremost, our on-site mix has reduced significantly. We used to be in the 30 percent range; we are now at 24 percent," Jayesh Sanghrajka, Chief Financial Officer of Infosys had said at the company’s Q3 earnings conference.

Among the top five Indian IT services players, HCLTech and Wipro have the lowest dependency on H-1B visas at just 20 percent, as almost 80 percent of these companies’ US workforce are locals hired onsite.

Ramachandran Sundararajan, Chief People Officer, HCLTech said, “In the US, about 80 percent of our people are locals. The number of H-1Bs we go through annually ranges between 500 and 1,000 at most.”

Wipro's Chief Executive Officer Srinivas Pallia said, “We have been hiring a significant number of local employees in the US, making them a large part of our workforce today.”

He added that Wipro has a strong inventory of H-1B visas and the company is well-positioned to move people as needed. “If demand rises, the supply side will not be a constraint for us," he said further.

Meanwhile, Tech Mahindra has only about 30 percent of employees deployed on H-1B visas in the States, though the US is the company’s largest market.

Speaking to Moneycontrol on the sidelines of the World Economic Forum in Davos, Mohit Joshi, CEO and MD of Tech Mahindra said, “Over the past many years… our visa dependence is quite low, so our overall visa dependence is under 30 percent. We have built out a very large workforce in the US. We also have reasonable near-shore delivery centers as well.”

Also, read: US clients are now more optimistic about future, says Tech Mahindra CEO

Increased H-1B visa registrations

Contrary to the commentary of the IT companies the demand for H-1B visa applications has continued to grow even in the cap fiscal year 2024, according to US Citizenship and Immigration Services (USCIS) data sourced from TeamLease.

The Cap Fiscal Year refers to the federal fiscal year (October 1 to September 30) for which the H-1B visa applications are filed and processed under the annual visa cap set by the US government.

Krishna Vij, business head-IT staffing at TeamLease Digital said, “The demand for H-1B visas in cap fiscal year 2024 was driven by the global digital transformation, increasing need for specialised talent in AI, cloud computing, and cybersecurity. The ongoing STEM skill gap in the US also fuelled demand, particularly in software development and AI.”

She added that the post-pandemic economic recovery has led to greater hiring in tech sectors. The favourable US immigration policies and stronger India-US economic ties encouraged continued reliance on foreign talent.

In their third quarter commentary, IT companies have alluded to early signs of demand recovery and improvement in discretionary spending by clients that would make calendar year 2025 better than 2024 for most.

Also, read: IT companies see healthiest recovery in the last 1.5 years in Q3 FY25 earnings

In terms of the number of H-1B applications, Kamal Karanth, Co-founder of specialist staffing firm Xpheno believes 2024 was a relatively better year than 2023 in both application volume and approval rates.

“2024 recorded a 3.1 percent growth in application volume and a 4 percent growth in approvals. 2024 also recorded a significant 32.5 percent drop in denials compared to 2023. The 98.4 percent approval rate of 2024 is the highest seen since 2021, making 2024 the progressive best in the post-pandemic period,” he said.

According to Karanth, the demand trends for H-1B from Indian IT service majors are driven predominantly by individual enterprise contexts. Enterprise demand for H-1B is defined by the health of their US order book value, fresh order pipelines, stage of projects in progress, project margins available, project velocity, client-level dynamics on leadership and project sponsors.

“The current outlook is for this positive climate to continue well into 2025 as well. Improving client sentiments, growing consumer spending, the US dollar rally, prospects of the new regime, moderating inflation, broad-based digital transformation, are all factors that have the potential to positively impact the prospects for the IT Services sector in 2025,” Karanth said.

The staffing firms argued that while demand for H-1B is set to be on an upswing trajectory in 2025, It remains to be seen if approval rates too will remain as high and healthy as they are.

Also, read: Why Sriram Krishnan’s White House entry shifted focus to immigrant work visas