US President Donald Trump’s decision to impose a $100,000 fee on new H-1B workers hired from outside the United States is expected to significantly reshape the IT outsourcing and staffing industry, a sector already under scrutiny for its dependence on foreign skilled labour.
The fee, effective from September for new petitions, represents the toughest restriction introduced so far by the Trump administration on the H-1B programme, which allows US employers to hire foreign professionals for specialised roles where comparable domestic talent is scarce, particularly in science and technology.
A Bloomberg News analysis shows the measure will disproportionately impact large IT services firms such as Tata Consultancy Services (TCS), Infosys and Cognizant Technology Solutions, which rely heavily on consular processing for new hires.
Between May 2020 and May 2024, nearly 90 per cent of new H-1B workers at these companies were approved at US consulates. Had the fee applied then, it would have resulted in hundreds of millions of dollars in additional costs. Infosys alone would have faced visa charges exceeding $1 billion, with more than 10,400 workers, or over 93 per cent of its new H-1B hires, affected.
TCS would have incurred the fee for about 6,500 workers, or 82 per cent of its new approvals, while Cognizant would have faced charges for more than 5,600 employees, accounting for 89 per cent of new H-1B hires.
Legal hurdle
States and business groups, including the US Chamber of Commerce, have filed legal challenges against the fee. Even so, industry observers say it is likely to trigger a sharp drop in visa demand and accelerate the shift of jobs overseas.
Immigration attorney Jonathan Wasden, who represents several IT employers, said companies are already adjusting hiring strategies and warned that higher costs could restrict access to exceptional overseas talent.
The IT consulting industry had already scaled back new H-1B hiring since 2024, and the fee is expected to push more work offshore, said Steve Hall, chief AI officer at Information Services Group.
US companies are likely to increase investments in India, the largest source of H-1B workers, over the next five years, he said. But to counter that, a bill proposing 25 per cent offshoring tax is in the pipeline.
Some major employers may opt out of registering candidates who require consular processing, said Finn Reynolds of legal tech firm Lawfully. Combined with a proposed overhaul of the H-1B lottery, the fee could reduce entries next year by 30 to 50 per cent.
TCS and Infosys have said their reliance on H-1B visas has declined. Infosys CEO Salil Parekh has said employees requiring visa sponsorship are now a minority, while TCS CHRO Sudeep Kunnumal said only about 500 associates travelled to the US on H-1B visas this financial year.
Prudential revoke
Several H-1B and H-4 visa holders have reported receiving notices from US consulates stating their visas were “prudentially revoked”.
Such revocations take effect immediately if the individual is outside the US, while those inside may stay until departure but cannot re-enter on the same visa.
The move reflects tighter screening and adds uncertainty for foreign professionals and their families globally.