The top seven India-based outsourcing companies received approximately 7,000 new H-1B visa petitions for initial employment in fiscal year 2016, representing a decrease of 37% between fiscal year 2015 and fiscal year 2016, according to a report published by the National Foundation of American Policy (NFAP). Each year, 85,000 H-1B visas, reserved for highly skilled foreign workers, are available, and due to heavy demand, they are awarded by lottery. In recent months the H-1B program has come under scrutiny by US President Donald Trump and members of Congress.

Although a recent executive order issued by President Trump calls for reforms to the H-1B visa rules, the report notes that the H-1B visa petitions analyzed by NFAP were filed by companies in April 2016, indicating that the decline was not due to any potential changes to the H-1B program. Instead, the report points to changing industry trends including the increased use of cloud computing and artificial intelligence, which require fewer employees to service US companies, and the choice by US companies to build up their US workforces instead of hiring workers from abroad as factors contributing to the decline of applications.

The report hints that due to companies’ increased demand for sophisticated technology, H-1B petitions from IT services companies are likely to continue to trend downward. Most outsourcing companies based in the United States and elsewhere also saw declines. In fact, the overall number of H-1B visa petitions filed this spring for fiscal year 2017 dropped by more than 30,000 from last year.

The report also notes that any new restrictions on immigration in the future would most likely encourage US companies to increase their investments outside the United States, both in foreign offices and offices of affiliates and through contracting with other foreign companies to provide services. Restrictions on the ability of IT services companies to apply for H-1B visas have the potential of increasing the amount of work that is performed outside the United States.

As an update to a recent post on H-1B visas, the US Department of Homeland Security (DHS) recently responded to an inquiry by US Senator Chuck Grassley (R-Iowa), who asked how DHS was planning to address abuse in the H-1B program. The DHS responded that US Citizenship and Immigration Services is planning to issue new rules and guidance consistent with President Trump’s executive order that would supersede or revise previous rules and guidance.