Bangalore, Stymied by the Visa Shortage, Hires in the U.S.

MindTree (MTCL), an Indian outsourcing specialist from Bangalore, has 11,000 employees doing work for customers in banking, insurance, and other industries. Most are in India. But since the company sometimes wants those workers to be close to the clients, MindTree has 850 employees in the U.S., working in 36 different states. Some are U.S. citizens or green card holders, but about 60 percent have entered the country on one of two types of work visas. With the U.S. unemployment rate higher than 8 percent, and Indian outsourcing already an issue in the presidential election, those visas are getting harder to secure. “Rejection rates are way up,” says Scott Staples, president of MindTree’s U.S. operation. “It’s so much harder to get visas approved.”

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Companies are pushing the Obama administration to ease up—and they’re enlisting corporate allies in the U.S. In March, 64 companies, including Boeing (BA), Procter & Gamble (PG), General Electric (GE), and Microsoft (MSFT), wrote to President Obama about “unprecedented delays” caused by what they called “an inconsistent and improperly narrowed definition” of what constitutes the type of specialized knowledge needed for an L-1B visa. The stricter interpretation of the rules dates back to early 2011, says Jay Ruby, a partner in Atlanta with Ogletree Deakins, the third-largest immigration law firm in the U.S. With the new definition of specialized knowledge, he says, the government is “essentially restricting eligibility to a handful of people.”

Indian companies are considering such alternatives as employing more locals. Tata hired 1,600 people in the U.S. last year, up from 1,200 in 2010. With the unemployment rate high, the pressure on visas is “inevitable,” says MindTree’s Staples, who predicts a decline in the company’s use of work visas. MindTree plans to hire 400 people at a new center in Gainesville, Fla., and Staples expects to open more centers in the U.S. “If visas become harder to get,” he says, “we have the ability to accelerate that.”