On today show, we are talking about the impact of the newly announced $100,000 fee associated with the H1B visa to the United States.
According to my research, historically the United States had admitted 65,000 H1 B visas per year with an additional 20,000 visa for those holding advanced US degrees.
Anytime there is a major policy shift. The marketplace will adapt and find a new way to optimize the allocation of talent. Silicon Valley was cited as one of the Main reasons for the policy change.
The tech industry has seen significant layoffs over the past year. Companies like Microsoft, Amazon, Google, Facebook have all released tens of thousands over the past year.
The policy change will probably see some of those laid off workers getting rehired and those international workers covered by a visa, now a very expensive visa, being sent home to their country of origin.
The largest user of H1B visas is Amazon with over 14,600 visa holders. At $100,000 a year each, this would cost an additional $1.4B in fees to the US government. I personally would be surprise if any company would just roll over and pay for an additional $1.4B in fees.
The top users are Amazon, TCS from India with about 5500, Microsoft with a little over 5100, Meta with about 5100.
Even Walmart has about 2400. I would bet that Walmart would move those positions to their software design center in Toronto or Ottawa and save $239M dollars with zero loss of productivity.
When I ran an engineering organization, we did not use the H1B Visa program to import labour per se. We used the program to bring a few people from some of the remote design centres and immerse them in the culture in our Sunnyvale office so that they could in turn cross pollinate the culture across the organization. It gave that individual a foreign expat assignment and at the same time improved the cohesiveness between the different design centres around the world. They would later return to their remote design centre.
I personally believe that the use of the H1B Visa will drop to nearly zero with the imposition of this new policy. That means another 100,000 people in high paying jobs will likely leave the US. These people will probably continue to work for the same company from their country of origin, if they are an individual contributor. If they are in a managerial role, then the relationship gets more complicated. I truly can’t think of too many companies that will be willing to pay that $100,000 fee for the visa.
This year 2025 was the first year in which US population has shrunk in almost 100 years.
Shrinking population means a shrinking economy, especially when you consider that 70% of the GDP is based on consumption.
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