President Trump recently announced the U.S. government intends to significantly modify its H-1B visa program for skilled foreign workers, including hiking the fee to $100,000 per visa.
We asked Seeking Alpha analysts Tunga Capital, Brett Ashcroft Green and Jack Bowman how they thought the changes might impact the tech sector, which accounts for the vast majority of the visas.
Tunga Capital: Tech is likely to be hit the hardest, since roughly two-thirds of H-1B visas go to tech-related jobs. For Amazon (NASDAQ:AMZN) alone, the new fee could translate into a billion-dollar cost. But if you think of this as a tariff, history suggests we’ll see subversions similar to transshipment in trade. I used to live in a Vancouver neighborhood with a lot of Infosys employees who exclusively served U.S. clients. Companies like Infosys (INFY), Wipro (WIT) and Cognizant (CTSH) know how to work this pretty well. Just get your employees in the same time zone.
I’m also seeing GitHub links and posts on X wherein anyone with AI in their resume is now looking to apply for the O-1 visa (for extraordinary ability). So, I think Big Tech will pick up on that, which might produce an artificial dip in H-1Bs while keeping global talent pipelines open at a lower cost.
Brett Ashcroft Green: The biggest issue that I don’t think has been contemplated in other pieces that I’ve read by immigration attorneys or financial publications is the “backdoor” method companies can use to retain their workers beyond the six-year maximum H-1B period. Having spoken to several high-net-worth clients in the past that work for tech sector companies, at around year six, a petition for an EB-2 or EB-3 visa is normally filed on behalf of the employee. The total fee schedule for everything needed to file such an application has largely been in the $20,000 to $30,000 range, with some variables.
At the same time that this H-1B news dropped, Trump also announced a Gold Card visa for those who individually gift $1 million to the U.S. government or have a corporation gift $2 million on their behalf. The corporate card would grant EB-1 or EB-2 status, similar to what happens in the H-1B to EB-2 conversion process accompanied by a Form I-140, which allows the employee to remain in the U.S. until a green card is approved. For many, especially those from India, actually getting this green card is little more than a dream due to backlogs, but they are still legally eligible to file Form I-140 and renew every three years, turning the H-1B into an indefinite working visa platform.
If this new corporate green card at $2 million is used as a way to replace this conversion process, it would be a huge issue for some truly exceptional employees coming up on six years that have not yet been sponsored for an EB-2 visa/green card. I would love to see how immigration attorneys chime in on this matter in the coming days.
Jack Bowman: Junior software developers, the largest target of H-1B visa employment, are where I think the risk of layoffs would be in the tech sector, but I expect them to be concentrated in small-cap and mid-cap firms, and it would likely be an idiosyncratic risk unique to that firm’s use of H-1B visa labor.
For mega-cap firms like Microsoft (NASDAQ:MSFT), the visa expenses they incur are likely worth it to them, and they will just pay to keep their employment funnel open, with few expected layoffs. They don’t bring in a huge number of workers; estimates for MSFT for last year show them bringing in around 5,000 H-1B visa holders. However, firms that rely too heavily on the visas could be harmed, like Amazon (NASDAQ:AMZN), which brought in around 10,000 people last year.
Although I think the overall risk to large employers is overblown, small and mid-sized tech companies that have kept expenses low with foreign labor may be at risk. Many of these firms could not operate for very long without cheap labor, and it seems unlikely that AI will provide relief fast enough. Again, that will vary from firm to firm and harm those heavily reliant on foreign labor.