IBM scales back H-1B visa hiring but still employs thousands. What about US tech talent?

One of the largest North Carolina Triangle employers is also among the top beneficiaries of an often-debated federal work visa program called H-1B.

Last year, IBM received more than 2,400 total approvals for new and continuing H-1B visas, the 15th most of any company, according to data from United States Citizenship and Immigration Services.

Since 1990, employers have sought H-1B visas to fill specialized jobs with foreign workers who possess at least bachelor’s degrees. Visas last up to six years, though workers who begin the green card application process can remain in the program as long their employer continues to sponsor them. Employers apply for new visas, which the government caps at 85,000 a year.

Most individual H-1B holders are male Indian nationals, federal data consistently shows. Many who come to North Carolina reside with their families in the Triangle.

Who in North Carolina hires H1-B workers?

In North Carolina, H-1B employers include school districts like Nash Public Schools (58 visa approvals in 2023), Halifax County Public Schools (44), and Charlotte-Mecklenburg Schools (27) as well as major Triangle-area universities. Last year, North Carolina State University received 148 new and continuing visa approvals, UNC-Chapel Hill had 94, and the Duke University Medical Center had 203.

But the biggest hirers of H-1B holders nationally are for-profit businesses. IBM declined to share how many of its visa employees work in North Carolina. So did Charlotte-based Bank of America, which received 535 H-1B approvals last year. Other major North Carolina companies like Lowes, Truist Bank and First Citizens Bank each had more than 200 visa approvals in 2023.

Why do companies say they need the visas?

“IBM makes only limited use of these visas to fill gaps in the labor market for in-demand skills that are required to meet IBM’s and our clients’ needs,” company spokesperson Sarah Minkel said in an email.

She added that the New York-based tech company has been “scaling back” its use of high-skilled visa programs as it continues to invest in programs “to help equip U.S. workers with in-demand skills.” Until recently, IBM’s Indian subsidiary (IBM India Private Limited) received a few thousand new or continuing H-1B visas annually. In 2023 however, the subsidiary received none.

Bank of America also said it uses H-1B visas selectively.

“These are very specialized hires,” a company spokesperson said on background. “Typically, anything that we do is driven by a very specific skill. It is an extremely rigorous process. And it makes up less than 1% of our total workforce.”

According to its latest annual report, Bank of America had roughly 171,000 U.S.-based employees.

First Citizens Bank, which is headquartered in Raleigh, saw a marked increase in its H-1B visa approvals last year. In 2022, the company received 53 approvals. In 2023, that total rose to 238.

Last March, First Citizens acquired Silicon Valley Bank, the failed institution that was popular among tech startups. First Citizens declined to comment on its use of H-1B visas.

Neither Lowes nor Truist responded to emailed questions from The News & Observer asking why they use this visa program.

Are there really not enough U.S. workers to fill the roles?

While companies like IBM and Bank of America said they only seek H-1B workers for tough-to-fill positions, some contend there are in fact U.S. employees to take on jobs currently being done by H-1B holders.

“We have empirical evidence that H-1B visa recipients are substitutable in many contexts with many otherwise available workers,” said Kirk Doran, an economics professor at Notre Dame University who has studied the visa program.

Doran did agree that increasing the talent pool with visa workers makes it easier for employers “to hire the specific workers they want.”

He also emphasized that the use of H-1B workers and U.S. workers isn’t one-to-one, meaning companies use fewer H-1B workers to complete the same work that its U.S. workers perform.

“It’s clear (employers are) crowding-out more than one otherwise-available worker for each H-1B worker,” he said.

He suggested H-1B employees might be working longer than U.S. workers. While workers under the high-skilled visa program must be paid the prevailing wage for their industry, Doran notes there aren’t restrictions on hours.

“It’s theoretically possible that H-1B employees — and there have been some reports that this has happened — would be willing to work many hours more than you’d expect because their ability to get a green card depends on their relationship with their employer,” he said.

Companies are hiring H-1B workers and doing layoffs. Why?

If H-1B workers themselves are laid off, they have 60 days to transfer their visas to new employers.

But as major tech employers have recently made mass job cuts, some criticize these companies for continuing to aggressively pursue H1-B visas workers (applications for the program reached a record high in 2023, which shows interest but also raised fraud concerns.)

“The H-1B program has many flaws that have become especially evident in light of recent mass layoffs in the tech sector,” wrote researchers from the Economic Policy Institute, a pro-labor think tank. “Instead of being used to fill genuine labor shortages in skilled occupations without negatively impacting U.S. workers’ wages and working conditions, the latest data show that the H-1B’s biggest users are companies that have laid off tens of thousands of workers in 2022 and the first quarter of 2023.”

The authors mentioned IBM, which cut 3,900 jobs early last year. The company said it would keep hiring in “higher growth” divisions.

IBM declined to share how many people it employs in the greater Raleigh-Durham area, but the long-time Research Triangle Park tenant has around 9,000 local workers according to Wake County Economic Development. The North Carolina Department of Commerce lists IBM as the fifth-biggest employer in Durham County. The company also owns the Raleigh open source software firm Red Hat, which received 96 H1-B approvals in 2023.

Some argue finding specialized U.S. tech talent remains difficult even after scores of industry job cuts.

“Because of layoffs and more prudent hiring practices, retention issues aren’t quite as bad as they once were,” wrote David Jarvis, a research at Deloitte. “However, executives are still struggling to fill senior technical roles like system architects, cybersecurity specialists, and those requiring AI expertise.”

And demand for IT workers is poised to increase. The U.S. Bureau of Labor Statistics projects tech sector hiring will “grow much faster than the average for all occupations from 2022 to 2023,” with an estimated 377,500 openings per year.

NC Reality Check is an N&O series holding those in power accountable and shining a light on public issues that affect the Triangle or North Carolina. Have a suggestion for a future story? Email realitycheck@newsobserver.com