I work for another company that has been doing this sort of thing for a long time. But instead of laying off employees and bringing on H1B's, they are bringing on recent college graduates that are also only H!B's and then making working conditions unbearable until the old timers here just leave out of frustration. There is such a high turn over rate here that we have all but stopped acknowledging when people leave. I am currently training 2 people and an expecting a third and I have to do this in addition to all other tasks that are assigned to me.
I miss the days when I could go to a first round in-person interview and get the job before walking out of the door. I am looking, but I am not having so much luck.
I think the problem is that many silicon Valley companies are employing these same sorts of strategies. Driving down wages by bringing in H1B's. Its like the management team reads in a business journal how all their competitors are doing this and they think that they have to do it too to keep up with the jones'. I think this is unethical and at worst, probably of questionable legality. theH1b program was designed to provide workers to supplement the workforce here because there weren't enough engineers to fill available positions. Now, the system is being used to replace engineers here with cheaper labor. This is not consistent with the intent of the provisions of H1b.