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Some companies pausing recruitment, budgeting and

workforce

plans

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Lawyers say firms looking to hire top talent in other

countries

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Startups could be disproportionately affected

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Trump administration announced new H-1B visa fee of

$100,000

By Aditya Soni and Echo Wang

SAN FRANCISCO/NEW YORK, Sept 23 (Reuters) - 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 ( NFLX ) 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.