Bank of America is starting to withdraw offers to some MBA students that graduate from US business schools this year, the Financial Times reported Monday.
The $787 billion stimulus package makes it more difficult for financial institutions like Bank of America that receive money from the government's Troubled Asset Relief Program, or TARP, to apply for H-1B visas for highly-skilled immigrants if they have recently laid off US workers, the paper said.
If a bank receives TARP money it must jump through more hoops to hire a foreign worker under the program, including making attempts to hire US workers first. The number of H-1B visas allowed is currently capped at 65,000.
Bank of America was "allowed to have the employees—the problem was Bank of America did not recruit American workers first and/or were going to replace American workers with those MBAs," Ron Hira, assistant professor of public policy at Rochester Institute of Technology, told CNBC.
"And we know Bank of America has policy in place to replace American workers with H-1Bs," Hira said, adding that the highly-skilled visa program is basically just a "cheap labor" program for companies.
But Vivek Wadhwa, professor at Duke University, said the move is "is just mean-spirited xenophobia."
"We have a mass exodus of skilled immigrants who are fed up of these xenophobic ways and the ways we're treating foreigners here," Wadhwa said. "What if all the immigrants decided to pull their money out of Bank of America and Citibank? You'd have a run on the banks and the economy would collapse."
The move should affect no more than 50 graduates, but is worrying business schools, the FT said.
"There might be an inclination for people from around the world to vote with their feet (and avoid US business schools)," David Schmittlein, dean of MIT’s Sloan school of management in Boston, told the paper.