Is Tesla replacing Americans with H-1B workers? Report highlights what's at play

Tesla is reportedly replacing many of its American workers in the United States with those from other countries and with H-1B visa. Tesla CEO Elon Musk has also stirred up a major controversy by openly backing employment of highly-skilled foreign workers in the United States despite pushback from several right-leaning ‘friends’ in the country's political spectrum.

According to this Electrek report citing information provided by current and former Tesla employees, the company has been increasing its use of H-1B visa to fill jobs left vacant after several rounds of layoffs earlier this year. These layoffs were mostly in Texas and California, and it is reported that almost every department as affected.

It is further reported that US Department of Labor data reveals Tesla requested for 2,000 H-1B visas around the time it was laying off people. This is around three per cent of the annual cap of 65,000 visas in the US.

What is an H-1B visa and what's Musk asking?

According to US Department of Labor, an H-1B visa program applies to employers seeking to hire nonimmigrant aliens as workers in specialty occupations or as fashion models of distinguished merit and ability. A specialty occupation is one that requires the application of a body of highly specialized knowledge and the attainment of at least a bachelor’s degree or its equivalent.

A qualified and selected foreign worker needs to be sponsored by a US company for him or her to get the visa which is typically valid for three years and can then be extended to six years. It is important for this person to keep his or her job with the visa sponsor during the validity period of the visa.

So what is Musk saying and will Tesla stand to benefit from more H-1B visas?

Musk believes the H-1B visa system ‘is broken’ and has vowed to ‘go to war’ to defend it. He has also called for ‘a major reform' to fix it. Essentially, he is backing a move to increase the cap currently in place for the visa type and says that the United States can benefit from getting highly-skilled workers from other countries.

Easily fixed by raising the minimum salary significantly and adding a yearly cost for maintaining the H1B, making it materially more expensive to hire from overseas than domestically.

I’ve been very clear that the program is broken and needs major reform.

— Elon Musk (@elonmusk) December 29, 2024

Critics, however, argue that any increase in the H-1B visa cap will result in locals losing jobs to foreign workers. It is often also argued that foreign workers are being wooed by US companies because they are willing to work at lower pay and for longer hours.

In all of this, many have dialled back time to trace how Musk himself came to the US. Born in South Africa, the world's richest person arrived on American shores on a student visa and not H-1B as is sometimes incorrectly believed.

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