The Trump administration’s hefty new visa fees for H-1B workers
have prompted high-level talks inside companies in Silicon Valley and
beyond on the possibility of moving more jobs overseas — precisely the
outcome the policy was meant to stop.

U.S. President Donald Trump on Friday announced the change to the visa program
that has long been a recruitment pathway for tech firms and encouraged
international students to pursue postgraduate courses in the United
States.

While the $100,000 levy applies only to new applicants —
not current holders as first announced — the confusion around its
roll-out and steep cost are already leading companies to pause
recruitment, budgeting and workforce plans, according to Reuters
interviews of founders, venture capitalists and immigration lawyers who
work with technology companies.

“I have had several conversations
with corporate clients … where they have said this new fee is simply
unworkable in the U.S., and it’s time for us to start looking for other
countries where we can have highly skilled talent,” said Chris Thomas,
an immigration attorney at Colorado-based law firm Holland & Hart.
“And these are large companies, some of them household names, Fortune
100 type companies, that are saying, we just simply cannot continue.”

About
141,000 new applications for H-1B were approved in 2024, according to
Pew Research. Though Congress caps new visas at 65,000 a year, total
approvals run higher because petitions from universities and some other
categories are excluded from the cap. Computer-related jobs accounted
for a majority of the new approvals, the Pew data showed.

FIRMS WILL CUT H-1B WORKERS

The Trump administration
and critics of the H-1B program have said that it has been used to
suppress wages and curbing it opens more jobs for U.S. tech workers. The
H-1B visa program has also made it more challenging for college
graduates trying to find IT jobs, Trump’s announcement on Friday said.

The visa previously cost employers only a few thousand dollars. But the new $100,000 fee would flip the equation, making hiring
talent in countries like India — where wages are lower and Big Tech now
builds innovation hubs instead of back offices — more attractive,
experts and executives told Reuters.

“We probably have to reduce the number of H-1B visa workers we can hire,” said Sam Liang, co-founder and CEO of popular artificial intelligence
transcription start-up Otter. “Some companies may have to outsource
some of their workforce. Hire maybe in India or other countries just to
walk around this H-1B problem.”

BAD FOR STARTUPS

While
conservatives have long applauded Trump’s wide-ranging immigration
crackdown, the H-1B move has drawn support from some liberal quarters as
well.

Netflix co-founder and well-known Democrat donor Reed
Hastings — who said he has followed H-1B politics for three decades —
argued on X that the new fees would remove the need for a lottery and
instead reserve visas for “very high value jobs” with greater certainty.

But
Deedy Das, a partner at venture capital firm Menlo Ventures that has
invested in startups such as AI firm Anthropic, said “blanket rulings
like this are rarely good for immigration” and would disproportionately
affect startups.

Unlike large technology companies whose
compensation packages are a combination of cash and stock, pay packages
of startups typically lean towards equity as they need cash to build the
business.

“For larger companies, the cost is not material. For
smaller companies, those with fewer than 25 employees, it’s much more
significant,” said Das. “Big tech CEOs expected this and will pay. For
them, fewer small competitors is even an advantage. It’s the smaller
startups that suffer most.”

INNOVATION AT RISK

The policy could also mean fewer of the talented immigrants who often go on to launch new firms, analysts said.

More
than half of U.S. startups valued at $1 billion or more had at least
one immigrant founder, according to a 2022 report from the National
Foundation for American Policy, a nonpartisan think tank based in
Virginia.

Several lawyers said startups they represent are pinning
hopes on lawsuits that argue the administration overstepped by imposing
a fee beyond what Congress envisioned, betting courts would dilute the
rule before costs cripple hiring.

If
not, “we will see a pullback from the smartest people around the
world,” said Bilal Zuberi, founder of Silicon Valley-based venture
capital firm Red Glass Ventures, who began his career in the U.S. on an
H-1B visa.

Additional reporting by Krystal Hu

—Aditya Soni and Echo Wang, Reuters