Microsoft’s Ballmer on H1-B Visas, Immigration

The Detroit Free Press recently interviewed Microsoft CEO Steve Ballmer who asked him why Microsoft in 2007 built a research and development facility in Canada–over the border in Vancouver–not that far from Microsoft’s quarters in Redmond, Wash.

Why not build it in the United States? Ballmer’s response:

While the Canadian R&D credit may have been a factor, it wasn’t the deciding one, Ballmer said. That would be immigration policy…”We opened the lab in Vancouver,” Ballmer said, “because we were having trouble getting visas for the best and the brightest to come to Seattle. The Canadian government said, ‘We’re happy to have those people.’ ”

“It’s a bit goofy,” he said, “because for every person we hire to be an engineer, there’s probably another four or five people who we employ at Microsoft. There’s another set of people employed in the community in construction and housing and retail, a bunch of different industries.”

In 2008, Microsoft employed more than 78,000 individuals. According to Fortune, Microsoft employs 47,645 in the United States and 30,920 in other countries. Microsoft has said publicly that less than 15 percent of its U.S. work force are H1-B visa holders–which would put the total number of visa holders in the 6,000 to 7,000 range.

The United States has a cap on visa holders at less than 15 percent, so Microsoft is maximizing its use of visas, but consistently lobbies the government for more. The claim? It just can’t find enough talent in this country. Ballmer appears to be beating on that visa drum again in this DFP story. Again, from the article:

“”I don’t care whether they’re American-born or Indian-born or Russian-born. I want to pay them to work in the U.S. That’s why I’m trying to get ‘em a visa…. I’m not trying to ship the job to India.”But Microsoft will locate the job in India, or Canada or wherever it can get the best talent.

Canada is well known for its generous R&D tax credit poilicies and the U.S. wavers on it frequently. From a Scitax Advisory Partners report entitled “North American Politicians Recognize R&D Tax Credits as a Useful Economic Fix”:

The low priority afforded this issue is witnessed by the fact that Washington has let its Research & Experimentation (“R&E”) tax credit expire no less than 13 times since it was originally enacted into law in 1981. In Canada – and most other countries with similar credits – R&D tax credits are fixed in legislation. But in the US, congress must vote on renewing the R&E tax credit every year. And frequently they vote against renewing it, which means technology companies can’t really count on it.

Canada’s R&D tax credits may be more significant than Ballmer wants the public and U.S. government to believe.

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Once the most sought after H-1B American work visa, still has nearly 20,000 slots open seven weeks after the US Citizenship and Immigration Services (USCIS) started receiving applications for the financial year 2010 beginning October this year.

The USCIS on Tuesday said it has so far received approximately 45,500 H-1B petitions counting toward the Congressionally-mandated 65,000 cap.

As such, the USCIS would continue to accept petitions subject to, till the cap is reached.

This is in contrast of the previous few years when the USCIS had to resort to computerized draw of lots as it received petitions outnumbering several times more than the Congressional mandated cap of 65,000 within the first few days after it started receiving H-1B applications.

USCIS said it has received approximately 20,000 petitions for the advanced degrees category.

However, it would continue to accept advanced degree petitions since experience has shown that not all petitions received are approvable, the USCIS said in a statement.

Congress mandated that the first 20,000 of these types of petitions are exempt from any fiscal year cap on available H-1B visas.

For the fiscal 2010, the USCIS started receiving H-1B petitions from April 1.

In the first five working days, it received 42,000 H-1B petitions.

In the month and half since then, USCIS has received just 3,500 more H-1B petitions, indicating the slump in demand for H-1B work visas.

This is mainly attributed to the current economic crisis, high unemployment rate in the US and also partly to the anti-H-1B sentiment prevailing in the United States at present.

Under the stimulus package, US companies, which receive federal money, are prevented from hiring foreign workers under H-1B visas.

Further the US Department of Homeland Security has launched investigations into alleged fraud cases related to H-1B visas and has tightened the application approval process.

At least two legislations are also pending in the US Congress, which if passed would make H-1B visas tougher for foreign technology professionals.

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