The U.S. job market continues to face challenges in its recovery, with a growing number of layoffs reported across various sectors. International employees on H1B work visas are particularly at risk, as they must navigate complex visa regulations in addition to the uncertainty of job security—a situation that can be both stressful and anxiety-inducing.
Recent data from Layoffs.fyi reveals that over 264,000 individuals in the tech industry lost their jobs in 2023, with more than 126,000 layoffs occurring by June alone. In light of these developments, it is crucial for H1B visa holders to be prepared for potential unemployment and to understand how to effectively manage the challenges that may arise from changes in their employment status.
The Process Behind Layoff Decisions: How Companies Choose
When a company faces the need to reduce costs through layoffs, the decision-making process typically involves several layers of consideration, with significant input from both management and the human resources (HR) department:
Performance and Skill Assessments
Companies frequently evaluate employees based on their performance, skill sets, and contributions to the company. Employees who consistently demonstrate high performance, possess critical skills, and contribute significantly to the company's goals are more likely to be retained. HR and management may rank employees based on these criteria, sometimes using methods like "stack ranking," where employees are compared against their peers to identify top performers and those who are underperforming.
Financial Considerations
Another key factor is the financial impact of retaining or letting go of certain employees. Companies might consider the cost of an employee relative to their output—high earners who contribute less may be more vulnerable during layoffs. Additionally, long-term employees with higher salaries may be at risk if the company is looking to reduce labor costs, even though this decision might lead to higher severance costs and potential legal challenges.
Strategic Alignment
Companies also look at how well employees’ roles align with the future direction of the business. For instance, if a company is restructuring or pivoting to a new business model, employees whose roles do not fit into this new structure may be considered for layoffs. Departments or teams that are not directly contributing to revenue generation or that are deemed non-essential may be targeted for reductions.
Seniority and Tenure
Some companies may follow the "last in, first out" (LIFO) principle, where newer hires are laid off first. However, this approach varies widely depending on the company’s goals and the need to retain critical skills and knowledge within the organization.
Legal and Ethical Considerations
Throughout the process, HR and management are mindful of legal obligations and the potential for litigation. This includes ensuring that layoffs are conducted fairly and without discrimination, and that the criteria for deciding who is laid off can be clearly justified if challenged.
The final decision on who gets laid off often involves weeks of debate, multiple revisions of layoff lists, and careful consideration of the overall impact on the company and its remaining workforce. By considering these factors, companies aim to balance cost savings with the need to maintain a functional and motivated workforce.
6 Strategies to Protect Yourself from Being Laid Off
1. Continuously Improve Your Skills
Stay up-to-date with the latest trends and technologies in your field. Investing in ongoing education and professional development makes you more valuable to your employer. This might include taking relevant courses, earning certifications, or attending industry conferences.
2. Showcase Your Value
Make sure your contributions to the company are visible. Regularly communicate your achievements and the impact of your work to your manager. Whether it's meeting targets, improving processes, or leading successful projects, highlighting your accomplishments can help reinforce your importance to the team.
3. Be Adaptable and Flexible
Companies highly value employees who can adapt to change and take on new responsibilities. Embracing flexible work arrangements and being open to relocation for the right opportunities can help you tap into new prospects during economic downturns or when your company faces challenges. Demonstrating a willingness to support the company where it's most needed makes you more valuable to your employer than those who are rigid about the roles they wish to play.
4. Build Strong Relationships & Stay Informed About Your Company’s Health
Networking within your company is crucial. Cultivate strong relationships with colleagues, supervisors, and other departments. Being well-connected within the company can increase your chances of being retained during layoffs, as decision-makers are more likely to advocate for someone they know and trust.
Another reason for networking is that being more involved in the inner circle can give you a better sense of your company's financial health and any potential warning signs of layoffs, such as declining profits, restructuring, or frequent management changes. This awareness can help you take proactive steps, such as seeking new opportunities if needed.
5. Establish a Financial Safety Net
While this doesn’t prevent layoffs, being financially prepared can reduce the stress if it does happen. It is essential to exercise financial prudence and avoid excessive spending. It is advisable to aim to save a sufficient amount to cover approximately 6 months of living expenses. It is advisable to prioritize the coverage of essential expenses, including housing, utilities, and groceries.
6. Equipped with Immigration-Related Knowledge
H1B workers face unique challenges compared to local employees, particularly when it comes to job security. If an H1B holder is laid off, they technically have only a 60-day grace period before their H1B status becomes invalid, requiring them to leave the country. Securing another H1B-sponsoring job within this short window can be extremely challenging, especially during economic downturns. If you find yourself in this situation, consider the following options:
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Negotiate with HR and Your Manager: Discuss the possibility of taking unpaid leave and using your last paycheck after that period. This could keep you on the payroll for more than 60 days, giving you additional time to find a new employer without the pressure of a tight deadline.
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Change Your Status: Consider switching to a different type of non-immigrant status, such as transitioning from H1B to H4 or H1B to F1 status, to maintain your legal stay in the country.
One of the common concerns when changing status is that, although you may remain in the U.S. legally, you could lose your ability to work legally.
If you are changing your status to H4, and the H1B holder has submitted an I-140, you can apply for an Employment Authorization Document (EAD) card, which allows you to continue working legally in the U.S., often with fewer restrictions than on an H1B visa. If you later wish to return to an H1B status after securing a new employer willing to sponsor your H1B transfer, you can change your status back from H4 to H1B. The same procedure applies when changing between H1B and F1 statuses.
If you’re considering advancing your studies to prepare for better opportunities, you might opt to change your status from H1B to F1. In this case, enrolling in Day 1 CPT universities is recommended.
Day 1 CPT universities allow graduate-level students to use Curricular Practical Training (CPT) work authorization from the first day of their program. This option is available even for those changing their status, enabling you to continue building your career while pursuing your studies.
Free Consultation with Kristen
Hi, I’m Kristen, a consultant at CPTDog. You can find my bio below. If my article didn’t fully address your questions, feel free to book a free consultation with me!
