The Trump Administration had decided that the US H-1B Visa program isn’t performing as intended. In a “Proclamation” issued by the White House on September 19, 2025, President Trump explains that the program is being “deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labor.”
The “systemic abuse” of the system is said to be creating a “disadvantageous labor market for American citizens.” In an effort to change that, the Trump Administration has introduced a new “restriction on entry” to the program that requires a $100,000 payment as part of visa petitions. Previously, the fees for petitions ranged from $2,000 to $5,000.
Obviously, the change will have an impact on the operations of US companies that have come to rely on foreign talent, which often includes companies in the tech sector. The depth of impact will depend on a wide variety of factors, including the size of the company and the resources available to support recruiting and retaining talent. What is certain, however, is that companies need to assess their exposure to the change and how the pivot it may require.
Increased visa costs will significantly reshape the domestic talent pool
A key factor to keep in mind when it comes to understanding the impact of the H-1B visa program change is the new $100,000 fee, which is generally non-refundable and only provides companies the chance to apply for a visa. There is no guarantee the application will be approved. Essentially, that means companies are now gambling with $100,000 instead of $5,000.
It’s difficult to imagine that most startups and other small to mid-size established companies will take that gamble. So where does that leave them? As the new program removes foreign workers from the equation, those companies will most likely be limited to fishing in talent pools limited to US workers who, in light of the removal of foreign competition, will now be in high demand.
US companies also need to consider that the tech talent pipeline, which is supplied in large part by foreign students studying at US universities, could be significantly disrupted by the move. Statistics from 2024 show that over 50,000 H-1B visa petitions were approved for applicants who were shifting their nonimmigrant status from student classification F-1 or F-2 visas.
A smaller talent pool puts a higher priority on keeping workers
The new $100,000 fee only applies to new H-1B petitions. Companies applying for extensions, amendments, or transfers will not need to pay the fee, which could cause problems for companies that currently employ those with H-1B visas.
Since transfers are exempt from the fee, competing companies won’t need to pay the fee if they recruit H-1B workers away from their current positions. Consequently, the tech industry may see a lot more headhunting by companies whose hiring strategies have been upended by the new visa program.
To avoid becoming the victim of headhunting, companies should carefully consider the efforts they are making to keep H-1B visa talent, not to mention other skilled tech talent. Employees who are paid well, given attractive benefits, and enfolded in a supportive culture will be harder to lure away. Now is the time for companies to ensure they are fostering a culture and environment that attracts and retains employees.
Foreign founders will have one less option for securing visas
The recent changes to the H-1B visa program are unlikely to have a significant impact on foreign founders leading businesses in the US. Because H-1B visas are secured by companies hiring nonimmigrant workers, they are not typically the tool used by foreign nationals seeking to establish businesses in the US.
H-1B visas can be used by founders in certain cases, but doing so requires a complex process of establishing a board of directors to hire the founder and supervise their work. More often, nonimmigrant founders are in the US on an E-2 Treaty Investor Visa, which is granted to those making a substantial investment in a US business, or an EB-2 National Interest Waiver, which is given to those whose work is considered a benefit to US interests.
The concern among tech companies over the ramifications of the H-1B visa shakeup is merited, especially for startups and others with limited operational budgets. But those companies should be aware that the shakeup may be short term, as legal challenges have already begun to surface. For now, tech companies should monitor how those legal challenges unfold while thinking through how they will adjust their strategies if the new program remains in effect.
Pedro David Espinoza, Founder and CEO of Pan Peru USA, is a Peruvian-American entrepreneur, investor, and author using technology and entrepreneurship to drive social impact. Espinoza previously founded SmileyGo, a platform connecting companies with nonprofits to improve impact investing.
