BACKLASH!

November 22, 2002: Michael Emmons, an IT worker on contract at Siemens
Information and Communication Networks, Lake Mary Fla, quit his job. He was due
to be replaced next month by a TCS employee on an L1 visa. Irked at being
replaced, and having to train his replacement to top that, Emmons set up a site
called www.hannatroup.com. Under a section called "Our Indian Replacements
from Tata Consulting India", the site lists names of TCS employees, their
telephone numbers, e-mail IDs and, in some cases, names of their children.
"Americans trained these foreigners and then the Americans got laid
off," it says. The agenda of hannatroup.com–to get people to sign a
petition to stop H1B workers coming to the US.

January 2003: American consulates in Delhi and Mumbai are rumored to have
stopped processing all H1B and L1 visas.

While the rumors are never confirmed, what definitely happened instead was
increased scrutiny of all visa applications and a whole lot of 221Gs given out
to Indian software companies with blanket L1s. (221G is a clause that allows the
consulate to ask for more information. It’s in some ways worse than a
rejection because there is now way of figuring out when, if ever, a 221G will
ever get a reply from the embassy).

February
2003: The US Department of Labor begins an administrative law hearing on a case
filed by Guy Santiglia, a former systems administrator at Sun Microsystems. His
charge — Sun Micro laid him off and thousands of other employees even as it
retained H1B workers and was applying for the ability to hire thousands more.
The company says Santiglia’s charges have no merit and that the Equal
Employment Opportunity Commission and Department of Justice had already
dismissed his claims. However there are other H1B cases in the offing including
Pete Bennett, an out-of-work Web programmer who filed a claim with the
Department of Justice saying he had been refused a job with another company on
the basis of national origin. Bennett co-runs the site www.nomoreh1b.com.

The road from San Jose to San Francisco is in many ways a trip across the
heart of Silicon Valley. The exits on Interstate 280 tell the story of the late
20th century’s greatest revolutions — Saratoga, Redwood Shores, Mountain
View, Palo Alto, Stanford University… The homes of some of IT’s greatest
minds and greatest companies.

And yet, the valley is today going through a churn. The revolution is turning
on its head. As the downturn cuts into jobs there is a certain panic in the air.
And it’s looking for a scapegoat. Increasingly, Indian companies and immigrant
H1B workers in the US are beginning to be the target of that angst. Apart from
the intense lobbying on

the H1B cap issue ( see Dataquest issue of January 15, 2003 ) there are signs
all over the net: www.zazona.com, www.fairus.org
, www.h1bprotest.com , www.hireamericancitizens.org
, www.stopimmigration.org , www.numbersusa.comÂ
…

Ashok Mukherjee, Chief Manager, HR at TCS whose employees’ names figure on
some of these sites, is concerned but not perturbed —as yet. "It’s
still an undercurrent," he says, "our employees have faced no
harassment on the ground level so far." The company has however taken up
the issue with Siemens where its employees are posted. Siemens is in turn
talking to various government agencies and industry associations. Ashok believes
the undercurrent will never burst out- Americans are too polite for that.
"But if it ever does, we have a real problem on our hands," he says.

Other India IT Services providers too are finding themselves in similar
situations. Bank of America cut nearly 3700 of its 25,000 tech jobs last year
some of which came to Infosys. Boeing outsourced some of its work to Russia and
Wipro in India. Ditto with Storage Tek — 300 sacked in Minneapolis as jobs
moved to India.

These deals generated a lot of hate mail and a whole lot of activity in chat
rooms that some Indian companies now actively monitor. A reason, says the
Marketing head of a large software services provider, "why large deals,
specially BPO deals, are increasingly shrouded in secrecy."

It’s also why on March 19th Wipro is calling its prospective clients to
meet with an existing one — Lehman Brothers. The company hopes the Lehman
Brothers’ CIO will talk about how he dealt with employee issues when he
outsourced jobs to India.

But is this enough? Are Indian IT services companies paying sufficient
attention to the issue?

Is your job next?

At the Nasscom strategy summit this February, the issue was certainly on
everyone’s mind. Almost every single speaker mentioned US job loss and
protection (vis a vis the New Jersey Bill) issues at least in passing.

For instance Zensar CEO Ganesh Natarajan spoke of when he went to meet the
CEO of a BPO firm in Florida the previous week. "He was carrying a magazine
whose cover said, Is Your Job Next?" British Minister for Small Business,
Nigel Griffith took a dig at the US when he said, "the British government’s
attitude to outsourcing is very strong. The environment couldn’t be more
favorable and is in total contrast to growing protectionism in the US."

Professor Sabyasachi Mitra of GeorgiTech Dupree college of management spoke
of "lot of resistance in the US to people coming there who don’t walk,
talk and look like them. But Protectionism is not the kind of thing the US does.
Besides, business has a lot of lobbying power."

Besides, there are indications that Nasscom itself is beginning to take the
issue seriously. Phiroz Vandrevala, past Chairman and executive vice president
Nasscom told members that the body’s executive committee had decided on a
public relations campaign and hired Hill & Knowlton for the job. "The
four pillars of that campaign are the media, analysts, B2B messaging and Public
Affairs." Vandrevala’s key concern vis a vis Public Affairs: the
Totalization agreement (that will protect Indian immigrants from dual taxation)
and the ongoing debate on the H1B cap.

Paul Taaffe, CEO of Hill & Knowlton however had a slightly different
take. "Job losses is a political debate. It’s what brings and throws
governments out of power. Besides, these people are completely emotionally not
ready to deal with losing white collar jobs to countries like India."
Taaffe’s prescription: you have to both defend and attack. "The emotions
the Forrester study generated (predicting 3 million jobs in the US will go over
the next 5 years) — you cannot fight them with facts." In fact, says
Taaffe, an Australian working in the US, "you cannot win the argument over
the next 12 to 24 months."

Question then is: will the issue go away after 12 to 24 months? And are
Indian companies geared to deal with it in the meantime?

March of history

History tells us that the issue will die its own death. Though the ability
of Indian companies to deal with it in the meantime may still be an open
question.

Says Ashok, "there have been waves of immigration to the US and of jobs
moving out in the past. Whenever the economy is at a low, xenophobia begins to
set in. But that changes as the economy begins to look up again."

Like Ashok, just about everyone talks of how American manufacturing and
textile sector jobs moved overseas. And how the US re-skilled and re-adjusted
itself. Says Laxman Badiga, Chief Executive for Talent Transformation at Wipro
Technologies, "we’ve seen the US worker switching and doing something
else in the past. In IT Services that will not be a problem. These people will
switch to something else." That, in fact, is the crux of the Indian
argument.

However, lessons from history aren’t always dependable bellwethers for
future policies. This time, the situation just might be different.

Says former Infosys marketing chief Phaneesh Murthy, "when manufacturing
started getting globalized the US economy shifted to services driven by an over
valued dollar and low productivity. There was a compelling cost to value
equation then and today 82% of American workers are in the services
sector." Now, he says, "we have the same drivers for services jobs
moving out. Few people realize that the US labor market is fundamentally
disadvantaged because they are working in a developed marked cost structure and
selling in a global/growing market cost environment."

What this means is that there are drivers other than just off-shoring to
India that is driving jobs out of the US. Besides, when manufacturing moved out,
people shifted to a services economy. Now, as Phaneesh says, "they don’t
have that luxury. Where do they move from here?"

History’s nice, but…

That’s a difficult question to answer. In many ways the services economy
is already seen as the highest end of the value chain.

While some IT services professionals and companies are likely to move up to
R&D and new technologies, a very large chunk will not make that shift. As
Laxman Badiga says, " In the BPO sector the kind of person being displaced
is a low skill person.

He will find it difficult to get a new job."

In fact, technology forecaster and Director of the Institute of the Future,
Paul Saffo (see interview) believes there is by now "structural
unemployment in silicon valley." He believes that there is already a
recovery underway but it’s a strange "jobless recovery." When the
economy recovers, he says, "silicon valley will not recover with it."
Phaneesh Murthy says those who are betting on things getting better once the
economy takes off "are betting that the global market will expand. But that
is not really a done deal."

At the moment the Indian argument rests around two things : (a) that the US
is not really a protectionist country and that it will not do anything to stop
jobs moving out and (b) that history vouches for the fact that things will
eventually find their own equilibrium.

While both of these assumptions might be true, it might perhaps be facile to
rest on them. While companies and countries might see the virtue of producing
more efficiently, individuals who lose their jobs might not. Hundreds of
thousands of jobs moving out is at the end of the day both an economic and
emotional issue. Either way, as Wipro Technologies CEO Vivek Paul said at the Q3
results recently, "We’ll hear more and more of this as time goes
on."

Sarita Rani with inputs from TV
Mahalingam in Bangalore

Visa Basics

Every now and then, the H1B visa has been in the eye of a storm as
anti-immigration lobbies get to work. In recent times, however, a lot of
attention is being directed at L1 visas, which are also used by Indian IT
services providers. WashTech (a Washington area IT workers’ union), for
instance, called it a "Stealth Visa" used by companies to bypass
stringent H1B regulations. Here’s a rundown on some of the key features of
both visas...

The H1B Visa

n One
of the most regulated immigration visas to the US

n Normal
validity 2-3 years

n If
an H1B loses her job, she has to return to India immediately. If she changes
job, an H1B transfer from the new employer is required.

n Any
company that has more than 15% of its workforce on US soil on H1B visas is
called an H1B Dependent company. (All large Indian software houses for instance
would be H1B dependent)

n H1B
employers have to show two things:

n An
NDA (non- displacement attestation): That is, companies have to show that no
American employee with similar skill sets was fired 90 days before or after an
H1B with those skill sets was hired.

n A
Recruitment Attestation: That is, show a "good faith" effort to find
similar kind of employee locally.

n Some
minimum wage requirements have to be met.

The
L1 Visa

n The
L-1 visa an "intra-company transfer" visa where the outsourcing
company (client) does not even come into the picture. It’s a temporary
transfer though the visa can and is given for periods of upto 6 years.

n Requires
that the employee going on an L1 must have worked for the company for at least
one year.

n L-1
employees can be paid any agreed-upon salary, without having to meet U.S.
government standards.

n To
be eligible for the L-1 category, the employee must be offered a position in the
U.S. as either a "Manager," "Executive" (referred to as an
L1A), or a person with "Specialized Knowledge" (referred to as an
L1B).

n Can
be used on multiple locations. So typically used for employees who are likely to
move from project to project in the US.

n Based
on some qualifications companies can be given Blanket L1s — which allows them
to send any number of employees on transfer.

The issue on the Net

STOP H-1b and L1 visa abuse AGAINST AMERICAN CITIZENS

nomoreh1b.com Sign the Petition to Stop H-1b

We Americans should not be MANDATED by management to TRAIN
foreigners then be laid off!

But it happens and Corporations will do anything to cut
costs. And Congress will do anything for Corporate Campaign Dollars.

They don’t care about you nor I so I have taken it
upon myself to fight this Corporate and Congressional greed.

-NEW– Meet Our Indian Replacements –NEW–

From: http://www.hannatroup.com:81/

Hire American Citizens

Home of the National Hire American Citizens Professional Society

Take Action! J O I N N O W !

America’s best paying jobs should be held by American Citizens.

Congress sold our high-tech jobs to foreigners and industry lobbyists. Companies
continue to import foreigners at the same time they are laying-off Americans.

Be American… Hire American!

Replace H-1B Workers With Citizens

From: http://hireamericancitizens.org

PERMANENT GUESTS: How Guestworker Programs Harm America

Proposals for "guestworker" programs that would allow millions of
foreign citizens to work in the U.S. guarantee that U.S. taxpayers will get the
short end of the stick:

n Guestworkers
displace American workers and lower American workers’ wages and working
conditions in certain job sectors.

n Guestworker
programs are a drain on the tax system.

n Guestworkers
rarely go home.

n Any
guestworker program that involves "earned legalization" is an amnesty,
a reward for law-breaking that is vociferously opposed by the American public.

From the Federation for American Immigration Reform
(FAIR) website (http://www.fairus.org/html/04194302.htm)

Recent News H-1B
Impact on Americans

Approximately 800,000 highly-skilled U.S. workers are now unemployed as a
direct result of Congress’ H-1B visa legislation, which failed to include ANY
protection for U.S. workers. Employers may hire foreign workers even when
qualified and equally qualified Americans are available, and may lay off
Americans while retaining H-1Bs in the same job category.

From http://nomoreh1b.com/

"Every year, over 1,000,000 Americans are
terminated from employment in the current economy. At the same time, the
Government of the United States dispenses over 600,000 H-1B and L-1 Visas
expressly to fill American jobs with foreign labor. If you believe that the
American people should not be relegated into such wholesale unemployment, this
site provides you with the means to help put this dynamic to an end,"

From www.zazona.com


TV  Mahalingam

‘Call Centers Can be Exploitative’>>>

Paul Saffo, Director and Roy Amara Fellow, Institute for the Future

Based out of Menlo Park, California, Paul Saffo is a technology forecaster
with a yen for making assertions that often seem to fly in the face of common
sense. He was the man who said technology would not abolish intermediaries, that
technology doesn’t drive change–people do, that the personal computer
revolution never really happened. Once again flying in the face of popular
rhetoric, technology forecaster and futurist Paul Saffo says call centers could
end up being exploitative of India’s youth; and that the threat to US jobs
will only get worse...

l Do you see a
long-term impact of outsourcing/offshoring on the US economy? Will US services
jobs moving out be a long-term issue?

It’s going to get worse. In fact, it’s going to accelerate. Folks can
wring their hands all they want about it, but their jobs are going to go out.
And guess what? They are going to go to countries like India not just because of
low cost but because of better quality. Today 40% of Silicon Valley consists of
Indians. They are better technically, they are beginning to get into management
consultancy, they are even better at handling phone calls in contact centers.
Outsourced workers are everywhere. Recently the Pentagon bought a supercomputer,
gave the software out to a US company and parts of its code is written by
Chinese programmers. Wait till the nay-sayers hear that an ex-commie is writing
code for the Pentagon.

The US has a whole world of problems coming its way both in the short term
and the long term. There is structural unemployment in Silicon Valley and when
the US economy recovers, Silicon Valley is not going to recover with it. In fact
there is already a recovery underway but it’s a strange kind of jobless
recovery. Those lost jobs are not likely to come back — automation, increased
efficiencies and offshoring will take care of those.

l Which is one
of the reasons we’ve seen a lot of vocal opposition to outsourcing to India in
recent months. The New Jersey bill and four other states for instance. Do you
see a long term impact on India as a result of this?

Well, the US is a nation that likes to blame others. So yes, India is going
to get some of the blame for lost US jobs. And post September 11, the US is
reacting in a really stupid manner. We’re making Silicon Valley a very hostile
place for foreigners.

And we’re already beginning to see the affects of the H1B protests. A north
western hospital complex for example says it is losing a billion dollars a
quarter because of inability to get skilled people in. Universities are
complaining that H1B restrictions are affecting basic research. The only ray of
hope is that the current administration is so profoundly stupid that I think we
are soon going to see George Bush’s popularity drop and a lot of the ongoing
repercussions of the so called war against terrorism might come to an end.
Americans are basically good people. They take a little long to recognize
injustice but when they do, they protest.

l There is a
lot of optimism in India about the Back Office/Call center industry. The
argument is that anything that creates jobs is a good thing. What’s your take
on the long term impact of the call center industry on India?

Shortening education to go to work is a mistake. We did that in the 1950s
when we told our young people — you don’t need to go to college…you’ll
get a job at General Motors right out of high school. And guess what happened
when General Motors moved manufacturing out of the US. Call centers are a job,
but it not clear that they can offer a career. As the industry grows in India,
care has to be taken to ensure that there is a career path beyond call centers
— otherwise, what began as well-intentioned creation of jobs could end up
being exploitative of India’s most important resource, it’s youth.

In particular, the Indian industry should look closely at the evolution of
call centers in the US. Back there, call center workers have complained of
stressful work environments and over-supervision. Some have even called some US
call-centers "sweatshops," comparing them to the problems of overwork
on factory floors. India has the chance to learn from mistakes made in America,
and thus avoid the risk of burning-out the very people who will make the next
Indian revolution happen.

There is one other risk — advances in voice recognition and AI eating into
the low-end of the call center business. Computers won’t replace humans
answering complex questions, but they are already are replacing operators at
AT&T and elsewhere for simple voice-interaction with callers. White caller
tele-center workers in the US have already lost jobs to computers, and the trend
will continue as technology advances.