"Analysts said the impact should be moderate, given that the fees apply only to new applications, but warned that a constrained supply of skilled workers in the U.S. may push wages higher and squeeze margins. Companies including Microsoft, Amazon, Alphabet and Goldman Sachs were among those that sent urgent emails to their employees with travel advisories."
""The H1B fee will constrain talent supply in the U.S., which in turn will drive up demand for locals or green card holders. IT firms will have to pay these employees more or risk losing them," Jefferies analysts said in a note. "The talent supply crunch will drive up onsite wages, which could drag profits by 4-13%.""
"Indian IT stocks slid on Monday, with the tech sub-index dropping nearly 3% and dragging the broader Nifty 50 index down. "We believe this will essentially shut out new H-1B visas except in extreme cases for Indian IT companies, as USD100K increment is nearly double their median salaries and doesn't make economic sense," Ambit Capital analysts said."
The administration proposed a $100,000 annual fee for new H-1B visa applications. The fee triggered premarket share declines for major H-1B sponsors and prompted travel advisories from large tech firms and banks. Analysts expect the immediate impact to be moderate because the fee applies only to new applications. Constrained supply of skilled foreign workers could raise demand for local or green card holders and drive up onsite wages. Higher labor costs could squeeze profit margins by several percentage points. Indian IT companies face disproportionate impact as the fee approaches double their median salaries, prompting stock declines.
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