One in 10 staff at California-based tech unicorns works from India: Study

India accounts for an average 12 per cent of employees at California-headquartered tech unicorns, second only to California, according to Stanford University research

Believe it or not: as many as one in 10 employees at California-headquartered technology (tech) unicorns work from India — more than those based in other major US tech hubs such as New York, Texas, and Washington, or in countries such as the UK, Canada, Israel, and Brazil, to name a few.

 

This structural shift towards remote shoring is expected to accelerate as the US government slams the brakes on visas, especially H-1B visas, while long waits for green card holders seeking US citizenship and the sizeable cost savings from the large salary differential between India and the US add to the appeal of hiring in India.

 

India ranks second, accounting for an average 12 per cent of the employees at these unicorns. California ranks first, with 21 per cent of their employees — or one in five — based in the state.

 

The findings are based on research conducted by Stanford University’s Graduate School of Business Venture Capital Initiative. The research, conducted in July this year, covered 334 California-headquartered startup unicorns and was based on 158,563 employee profiles. 

 

The rest of the top 10 locations from which employees working at these unicorns come include the UK and New York at 5 per cent each, Texas at 4 per cent, Canada at 3 per cent, and Pakistan, Brazil, and Washington at 2 per cent each.

 

What is interesting is that half of the employees at California-headquartered unicorns are based outside the US, with India accounting for the lion’s share — more than 46 per cent — of employees stationed in foreign countries.

 

There are, of course, specific advantages. According to PlugScale, for California startups, setting up a core engineering team in a tech hub in India can result in cost savings of 60-80 per cent compared with hiring the same employees in California.

 

Another reason is that nearly one in 16 startup founders in the US who came to the country from abroad are Indians, according to the Stanford University database. This could make them more comfortable with having a large part of their workforce and business operations in India, which also offers a considerable cost advantage.

 

The US government has also tightened the screws on H-1B visas, raising the fee to $100,000, potentially removing the grace period and targeting renewals, many of which are now facing legal challenges.