Tech Check

Job Cuts and Foreign Workers; What's the Tech Community to Do?

Tech Jobs

Looking back at 2008, tech industry job cuts were the highest in five years, with the pace dramatically accelerating during the second half of the year, and the momentum continuing to surge during this past month. And with the H1B Visa application window opening on April 1, companies are beginning to feel a patriotic pressure to lay off foreigners over Americans, and slow the pace of H1B applications, to prop up the nation's economy and stem the flow of domestic job losses.

Challenger, Gray & Christmas reported today that the pace of tech industry job cuts jumped 167 percent in the second half of 2008, with computer, electronics and telecom firms slashing 186,995 jobs in 2008. It's the highest total since the 228,325 job cuts in 2003. And January is shaping up to be equally brutal.

Microsoft , Intel , Sprint Nextel , Texas Instruments , Motorola, Advanced Micro Devices , Circuit City, and dozens of other tech stalwarts have cut over 110,000 jobs this month alone. Economist Steven Levy from Silicon Valley's Center for the Continuing Study of the California Economy says, "I think for the next 12 months, there will be layoffs, a little new hiring, but that will be swamped by the layoffs."

And that swamping is putting enormous pressure on companies to cut workers here on visas first, especially with so many available American workers scrounging for jobs. Senator Charles Grassley (R-Iowa) fired off a letter last week to Microsoft after the company's layoff announcement, imploring the company to think carefully about where it makes those cuts: "Microsoft has a moral obligation to protect these American workers by putting them first during these difficult economic times." He told me this morning, "H1B workers should be laid off before American workers. In other words, it's 'Hire Americans first.'" He wants to make sure "American corporations do everything they can to find American workers before they bring in workers from other countries."

It all makes sense, if the tech industry was akin to the auto industry or even the teaching profession where entrenched interests seem to trump performance so often. But here in Silicon Valley, where meritocracy has always ruled the day -- and companies bitterly compete for the best and the brightest, who must prove themselves every day, no matter what country they're from, the H1B-visa-vs.-American-worker debate isn't so cut and dry. It's why unions have never found a welcome home here.

It's a sensitive topic, to be sure, which might explain why none of the companies we called for comment about any of this would talk about it on camera. However, Carl Guardino, the CEO of Silicon Valley's Leadership Council and a lobbyist for the Silicon Valley tech community, says "It is important for us to have talent from around the globe to make sure we stay competitive."

He says in the tech industry today, 53 percent of the engineers are "foreign born" and half the CEOs and founders of tech companies are foreign born.

"If America ever goes against our strong roots of welcoming talents from around the world, wanting to work here, contribute here, be a part of America, that's the day that we are risking everything that this democracy is about," he says. "We cannot take an attitude in good or bad times that suddenly we should be throwing immigrants out."

The bottom line: As grim as the economy is today, and as much as we might want to protect our citizens from losing jobs to foreigners, giving US citizens the inside track because of their citizenship over their abilities is a short-term fix with long-term, negative implications. If a US worker's skills are equal to the skills of a non-US citizen's, then sure, the US worker should get the job. Go Team! If it's about salaries and money-saved, and how much more cost-effective a foreign-born worker might be over his US counterpart in a similar position, then legislators and companies need to re-work the H1B visa program.

But if it comes down to cutting your engineering team because they're all from India so you can keep your American born employees on the shipping dock, you shouldn't have to lay off your engineering team just because they're foreigners.

The whole idea here should be about hiring the best and the brightest, no matter where they're from.

It's the only way US companies, or any company, can expect to compete in a global market. Period.

Easy to become xenophobic in an economic climate like this one, though we do so at the risk of not just dulling our competitive edge, but losing it completely.

Questions?  Comments?