New federal data shows U.S. tech workforce being replaced by global labor

For many American technology workers, the transformation of their industry didn’t begin with a headline or a government report. It began quietly, with fewer interviews, contract jobs replacing full-time roles and positions that once seemed plentiful suddenly becoming harder to find.

Over time, many began to notice something else. Teams were changing. Entire projects and teams increasingly staffed through consulting firms, projects outsourced through vendor networks and hiring pipelines that extend far beyond the domestic labor market.

Some workers spoke out. Others filed complaints. A few pursued lawsuits. But proving what they were seeing was far harder than describing it.

For years, the experiences of American tech workers were often dismissed as anecdotal or isolated incidents. Yet in recent times, several legal cases have begun to indicate something deeper was happening inside parts of the technology labor market.

In one of the most notable examples, a federal jury found in late 2024 that the IT consulting giant Cognizant discriminated against American workers in its hiring practices. Evidence presented during the trial showed the company’s workforce was overwhelmingly foreign-born, with internal communications and hiring patterns suggesting American applicants were routinely disadvantaged.

For many observers, the case raised a larger question: Was Cognizant an outlier or part of a broader hiring model reshaping the industry? Until recently, answering that question was difficult. But newly released federal data is beginning to provide the clearest picture yet.

The new dataset released by the U.S. Census Bureau’s Business Dynamics Statistics of Human Capital (BDS-HC) program offers an unprecedented look inside the workforce composition of American companies. By linking millions of W-2 tax records with employer data, the program tracks how companies grow and how the demographics of their workers change over time.

For the first time, researchers can see how workforce composition intersects with business formation, job creation and industry growth across nearly the entire U.S. employer economy between 2006 and 2022. And what the data suggests is something many American tech workers have long suspected.

Cognizant may not have been an anomaly. It may have been following the model. With federal data now mapping workforce composition across hundreds of thousands of companies, the evidence is stronger than it has ever been. For the first time, policymakers and regulators can see the scale of the hiring patterns that many workers have been describing for years.

Inside the Census workforce-composition data: A workforce that is increasingly ‘global’

The Census workforce tables do not identify visa status. Workers classified as foreign-born include naturalized citizens, permanent residents and temporary visa holders. But the industries where foreign-born workforce shares are highest overlap heavily with the same sectors that dominate H-1B visa filings, a connection that has fueled years of debate in Washington, D.C.

Supporters of the visa program argue that global recruitment allows companies to fill skill shortages and maintain technological leadership. Critics counter that the consulting model gives companies access to a vast international labor pool that competes directly with the domestic workforce.

What the Census data provides is the clearest statistical picture yet of how the structure of the technology labor market has evolved.

Two decades ago, the typical American technology firm looked very different. Today the sector operates inside a global labor market. Small consulting companies recruit engineers around the world, many from India, and large corporations integrate those workers into their project teams through contracts and vendor relationships.

The new Census data reveals the result: a workforce that is steadily becoming more and more international.

The shift did not happen overnight. It unfolded quietly, year by year, through thousands of hiring decisions across an industry that now sits at the center of the American economy.

For many American tech workers, the data now provides something that was previously missing from the conversation: statistical evidence that the changes they insist they have been experiencing across the industry are indeed part of a broader and very real structural shift. Taken together, the federal numbers reveal how profoundly that transformation has reshaped the modern technology workforce.

Behind the data: the scale of the workforce transformation

The Census workforce tables do more than illustrate a trend. They reveal the scale of the shift.

When the data is examined across firm size, industry and state, the pattern becomes difficult to dismiss as a temporary spike or a regional anomaly. Instead, it points to a broader restructuring of the labor market inside the industries most closely connected to the consulting pipeline.

The Business Dynamics Statistics of Human Capital (BDS-HC) program classifies companies based on the share of workers belonging to specific demographic groups and tracks the full set of business-dynamics measures tied to those companies, including employment, job creation, job destruction, openings and closures.

Viewed through that lens, the scope of the change becomes clear.

Across all industries and company sizes, American companies where 75-90% of workers were foreign-born or more than 90% were foreign-born grew from roughly 459,254 companies in 2006 to about 707,442 in 2022. Their combined employment rose from 2,304,412 workers to 3,366,786, an increase of 1,062,374 jobs.

Companies with overwhelmingly foreign-born workforces therefore accounted for a significantly larger share of the U.S. employer base by the end of the period than they did at the beginning.

The pattern was not confined to a handful of global corporations. It spread across the American economy through hundreds of thousands of companies, gradually reshaping the structure of the workforce one employer at a time.

Where the transformation is most visible

The most revealing numbers sit inside the industries most closely associated with the H-1B hiring model. Chief among them is the Professional, Scientific and Technical Services sector, the industry that includes software engineering, IT consulting, cybersecurity and technical staffing firms.

This sector forms the backbone of the modern digital economy. It is also one of the largest users of employment-based visa programs. Over the past two decades, Census workforce data shows that the structure of this industry has changed dramatically.

Thousands of American companies now operate with workforces where foreign-born workers make up a large share of employees. The most significant growth has occurred in companies where foreign-born workers represent 25% to 50% of the workforce, as well as in companies where that share rises above 90%.

Those two categories represent very different parts of the industry. But together they reveal how the hiring model itself has shifted.

In Professional, Scientific and Technical Services, the small-firm consulting layer expanded rapidly. Among companies where foreign-born workers made up 50-75%, 75-90% and more than 90% of the workforce, the number of companies grew from roughly 75,157 in 2006 to about 125,325 in 2022. Their combined employment rose from 419,874 workers to 797,994, an increase of 378,120 jobs, or nearly 90%.

Among the smallest employers, companies with 1 to 19 employees, the shift is even clearer. The number of companies where more than 90% of workers were foreign-born rose from 40,743 to 75,698. Employment inside those companies climbed from 89,156 to 148,162. That is not a marginal change. It represents the expansion of an entire business model.

At the same time, the companies many would assume represent the traditional domestic base of the industry barely changed. Small professional-services companies where less than 10% of workers were foreign-born increased only slightly in number, from 437,379 to 453,797, while total employment in those companies actually fell from 1.6 million workers to 1.52 million. The contrast is difficult to ignore: The most American-heavy portion of the small-company market remained largely flat, while companies with much higher foreign-born workforce shares expanded rapidly.

The pattern continues among mid-size employers with 20 to 499 workers. Employment in companies where 10-25% of workers were foreign-born rose from 754,416 to 1,167,368. In companies where the share reached 25-50%, employment climbed from 325,278 to 471,328. Even companies where 50-75% of workers were foreign-born expanded from 78,030 to 117,778 workers. At that scale, the trend becomes harder to explain as a startup phenomenon. By the time these companies reach the middle of the market, the foreign-born share of the workforce is still rising.

How the shift appears inside large corporations

The same transformation can be seen among the largest employers.

Among companies with 500 or more workers in Professional, Scientific and Technical Services, the most dramatic growth occurred in companies where 25-50% of workers were foreign-born. Employment in that category rose from 278,058 in 2006 to 851,557 in 2022, a gain of more than 573,000 jobs, or roughly 206%.

Employment in companies where 10-25% of workers were foreign-born also surged, rising from 1.8 million to 2.55 million workers.

In other words, the large-corporate side of the industry did not become overwhelmingly foreign-born. Instead, it became increasingly dependent on mixed international workforces at a scale that barely existed two decades earlier.

That distinction matters. The small-company side of the industry shows where the pipeline is densest. The large-corporate side shows where that pipeline leads.

Census data also suggests that younger companies with very high foreign-born workforce shares have expanded quickly. That indicates the shift is not only the result of older companies gradually changing their hiring patterns. It also reflects the creation of new companies built around this workforce model from the start.

The geographic data tells a similar story. Growth is concentrated in states most closely tied to technology, consulting, finance and contract staffing. In other words, the pattern is not abstract or theoretical. It is unfolding in the labor markets where American tech workers compete most directly for jobs.

The consulting pipeline behind the numbers

To understand how this transformation occurred, it helps to understand the consulting model that now dominates large parts of the technology labor market.

Many large corporations no longer hire engineers directly. Instead, they rely on consulting firms that recruit workers, sponsor visas and deploy those workers to corporate clients. An engineer may spend years working inside the same company, sitting alongside employees hired directly by the corporation. But technically the worker remains employed by the consulting firm, which collects a margin on the contract.

Multiply that arrangement across thousands of companies and the result begins to resemble something very different from the traditional American hiring model.

It becomes a labor supply pipeline. That pipeline has become deeply embedded across the technology services industry. And the Census data shows how large that ecosystem has become.

The companies operating at the front of the pipeline are often small. Yet they play an outsized role in the hiring system because they function as recruiting and placement channels for larger corporations. In effect, they supply labor to the broader technology economy.

Large companies rarely appear in the most extreme category, where more than 90% of workers are foreign-born. Instead, they operate with mixed workforces that combine domestic employees with internationally recruited talent. The consulting firms act as the mechanism that feeds that system.

This shift is occurring alongside a broader change in the national workforce. In 2024, foreign-born workers made up about 19.2% of the entire U.S. labor force, the highest share on record.

At the same time, the native-born labor force has grown far more slowly. In many industries, that shift reflects immigration trends and demographic change. But in the technology consulting sector, the Census data points to something more structural: an industry increasingly built around global talent pipelines.

Taken together, the numbers suggest a fundamental change in how the technology workforce is assembled, one that unfolded quietly across thousands of companies over the course of two decades.

The broader labor trend

The broader significance of the data is easy to miss if the numbers are read one table at a time. Taken together, the linked Census files show a labor market that has been changing in three inter-connected ways at once.

First, the number of American companies with very high foreign-born workforce shares has grown sharply across the economy.

Second, in sectors most closely tied to the H-1B pipeline, particularly professional, scientific and technical services, the fastest employment growth has occurred in firms with far higher foreign-born concentrations than the national labor force as a whole.

Third, the consulting model increasingly operates as a two-level labor system: smaller firms with overwhelmingly foreign-born workforces functioning as labor suppliers and larger corporations operating with mixed international workforces that rely on those suppliers.

The Census tables do not prove visa abuse by themselves. They do not identify H-1B workers specifically. The dataset classifies employees by nativity, not immigration category. But for anyone trying to understand how the modern consulting pipeline reshaped hiring across the technology sector, the patterns in the federal data point in a consistent direction.

The implications extend well beyond Silicon Valley. When the structure of hiring changes inside one of the country’s most important industries, the effects ripple outward through the broader labor market, shaping wages, career opportunities and the competitive landscape facing workers across multiple sectors.

For many American workers, particularly those in technology and other knowledge industries, the transformation documented in the federal data helps explain a reality that has been unfolding quietly for years: a labor market increasingly organized around global recruiting pipelines rather than traditional domestic hiring.

Seen in that context, the Census numbers point to something larger than a simple demographic shift. This was not just immigration changing the workforce. It was a business model reshaping how the market itself operates.

The data also reveals a workforce that, in key industries, is becoming steadily less American, with the shift occurring faster than many policymakers and workers ever realized.

With the numbers now in the open, the question facing the country may be simple: What kind of labor market do Americans want to preserve for the next generation? The answer may shape the future of the American workforce itself.