Tech giants brace for H-1B visa disruption after Trump admin hikes fees

President Donald Trump’s newly announced $100,000 annual fee on H-1B visas, effective from midnight of September 20, has disrupted global markets and sparked alarm across various industries. 

After the announcement was made on Friday, major companies including Microsoft, Amazon, and JPMorgan sent urgent internal memos to staff, instructing H-1B visa holders already in the United States not to travel abroad, and urging those outside the country to return before the new fee system takes effect.

The tech industry is bracing for market disruption

The Trump administration announced its immigration policy, a $100,000 annual fee, on H-1B visas, the temporary employment permit used by thousands of foreign workers in the U.S. technology sector.

The policy is set to take effect by midnight Saturday and is part of President Donald Trump’s crackdown on both legal and illegal immigration since he took office in January.

“H-1B visa holders who are currently in the U.S. should remain in the U.S. and avoid international travel until the government issues clear travel guidance,” the law firm Ogletree Deakins wrote in an advisory to staff. The firm handles the bank’s visa applications.

Commerce Secretary Howard Lutnick defended the measure, saying that it was a way to prioritize American graduates.

“If you’re going to train somebody, you’re going to train one of the recent graduates from one of the great universities across our land. Train Americans. Stop bringing in people to take our jobs.”

The new fee, which is reportedly $100,000 a year for each of the three years of a visa’s initial duration, is a significant increase from the current application costs of only a few thousand dollars. Analysts warned that the change could increase labor costs by millions for large firms, while startups and smaller tech firms could find the added burden unsustainable.

India is bracing for impact

The new rules have also rattled India’s $283 billion IT outsourcing industry. The Asian nation accounted for 71% of H-1B approvals in 2024, far ahead of China’s 11.7%, according to government data.

“The additional cost will require adjustments, and the one-day deadline for implementation is destabilizing,” Nasscom said in a statement. The group added that the measure could have “ripple effects” on U.S. innovation and the global job market, particularly in technology services and artificial intelligence.

Some analysts noted that the rule could force companies to relocate their high-value projects overseas, which would unintentionally accelerate the transfer of talent and capital to rival innovation hubs in Asia and Europe.

“In the short term, Washington may collect a windfall; in the long term, the U.S. risks taxing away its innovation edge, trading dynamism for short-sighted protectionism,” Jeremy Goldman, an analyst at eMarketer, said.

Critics of the H-1B program argue that it has been used to depress wages for American workers, but supporters insist that the visa brings in talent that the domestic labor market cannot supply fast enough. Tesla CEO Elon Musk, himself a former H-1B holder, reiterated on X that the program is “essential” to filling the skills gap.

The H-1B program currently offers 65,000 visas annually, with an additional 20,000 visas available for individuals with advanced U.S. degrees.

At the same time, Trump has signed an executive order to create a new immigration track dubbed the “gold card.” For a one-time payment of $1M, foreign nationals will be eligible for U.S. permanent residency. Supporters of the measure believe it will attract wealthy investors, while critics believe it increases inequalities by privileging the wealthy over skilled professionals.

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