New Delhi: President Donald Trump’s proposed $100,000 fee for new H-1B workers hired from outside the US is poised to hit the IT outsourcing and staffing sectors hard, potentially reshaping how multinational companies hire skilled foreign talent. The levy represents the most stringent restriction the Trump administration has placed on the employment of foreign workers to date.
A Bloomberg analysis highlights the impact on major staffing firms, including Tata Consultancy Services, Infosys, and Cognizant Technology Solutions, which often act as intermediaries for H-1B hires. Nearly 90 per cent of their new H-1B hires between May 2020 and May 2024 were approved at US consulates, meaning the $100,000 fee could have added hundreds of millions of dollars to their costs.
“More than 93 per cent of new Infosys H-1B hires in that timeframe, upwards of 10,400 workers, would have been hit with the $100,000 fee,” Bloomberg notes, translating into over a billion dollars in visa charges. Tata would have faced the fee for 6,500 employees, or 82 per cent of new hires, and Cognizant for more than 5,600, or 89 per cent of new H-1B employees, as per the report.
Legal Challenges And Industry Response
Even with potential legal challenges, the IT industry expects a sharp reduction in visa demand and increased offshoring of jobs. “We’re already seeing that happen,” said immigration attorney Jonathan Wasden in the report. “The fear is that if you have truly exceptional talent overseas, those people are definitely going to be missing out.”
Some companies, however, anticipate minimal short-term impact. “The recently announced Proclamation is expected to have limited near-term impact on Cognizant’s operations,” said Cognizant spokesman Jeff DeMarrais, noting that visas are now primarily used for select technology roles supplementing the US workforce, as per the report.
A Shift In H-1B Hiring And Global Talent Strategy
Historically, the H-1B program has been dominated by large IT firms, which use it as a pathway for foreign workers with bachelor’s degrees. While the program has faced criticism for undercutting domestic wages, early-career H-1B employees typically earn well above the US median wage.
Experts predict that new costs and lottery changes could reduce entries by 30–50 per cent in the next H-1B cycle. “The Trump administration’s $100,000 fee, combined with the weighted-lottery rule, has created an entirely new set of incentives that will reshape market behaviour vis-a-vis the H-1B lottery,” said Finn Reynolds, director of market research at Lawfully, as per the Bloomberg report.
The fee may accelerate IT offshoring, as US firms invest more heavily in India and other talent hubs. “If you want to access the world’s best talent, you have to go where the talent is,” said Steve Hall, chief AI officer at Information Services Group, claims the report.
