Shares of the American technology companies slipped on Monday after President Donald Trump revealed the steep new visa costs as part of his immigration -free action, which was concerned about higher labor costs and stricter access to skilled employees.
The Trump administration said on Friday that companies would ask to pay $ 100,000 a year for H-1B working visas, so that some major technology companies and banks warn employees to stay in the US or return quickly.
Analysts said that the impact should be moderate, since the costs only apply to new applications, but warned that a limited delivery of skilled employees in the US can push wages higher and press margins.
Companies such as Microsoft, Amazon, Alphabet and Goldman Sachs belonged to those who sent urgent e -mails to their employees with travel advice.
Shares of Cognizant Technology Solutions, JP Morgan and Intel, which are among the largest sponsors of H-1B-VISA, fell between 1.2% and 1.6% in Premarket trade.
“The H1B allowance will limit the talent provision in the US, which in turn will call for the demand for locals or green cardholders. IT companies will have to pay these employees more or the risk of losing them,” said Jefferies analysts in a note.
“The Talent Supply Crunch will rise on the spot, which can drag the win by 4-13%.”
Indian IT employees are the majority of H-1B applicants, and although Indian IT companies have long benefited from American work visa programs, they are now confronted with the prospect of higher costs and slower revenue growth.
Indian it slipped on Monday, with the technical subindex that falls almost 3% and drags down the wider Nifty 50 index.
“We believe that this will essentially exclude new H-1B-VISA, except in extreme cases for Indian IT companies, because USD100K incrrement is almost double of their median salaries and not economically useful,” said Ambit Capital analysts.
-Samuel Indyk and Akash Sriram, Reuters
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