IT firms in a flux over H-1B visa fees, but levers exist to mitigate impact

Analysts say Indian IT firms can offset the impact of the $100,000 H-1B visa fee through higher offshoring, reduced new applications, and client cost sharing over the medium term

On September 19, the executive US presidential order to impose a one-time payment of $100,000 on new H1B visa applications sent on and after September 21, sent shockwaves through the IT industry. Analysts are trying to assess the likely damages and the long-term consequences. 

 

Earnings before interest and tax (EBIT) margins could be negatively impacted by anywhere upwards of 0.5 per cent and earnings per share (EPS) may reduce by close to 6 per cent for the highly exposed.

 

In the medium term, corporates and vendors could move away from visa dependency, shift more work offshore and share higher cost