Market Update 29th September 2025

To H-1B or not to H-1B

A little over a week ago US President Donald Trump signed an executive order which will require US companies sponsoring H-1B visas to pay $100,000 per submitted application. The president has long talked about immigration into the US, both illegal and legal, however this is particularly interesting for the tech sector.

The H-1B visa allows for companies to hire highly skilled foreign workers in a speciality occupation. It is important for hiring skilled labour where there are gaps in the American workforce. The median wage of a H-1B visa holder is around $120,000. For reference this is close to the 90^th percentile of all US wages, however the average wage in the tech sector is around $105,000. POTUS believes the system has been abused and disadvantages the US workforce. But let me give you some numbers.

The majority of applications, around 63%, in 2023 were for computer related jobs, eg, computer scientists, analysts, or engineers. And nearly half of H-1B employers are in professional science or tech sectors. Typically only around 85,000 visas are granted each year, which shows you the demand in tech for these visas.

California, which is a tech hub for the country, is the top state for H-1B visa applications and has been since 2018. It has received over 62,000 applications in 2025 so far.

Within the first half of 2025 Amazon, via its AWS unit, received approval for over 12,000 visas, and Meta and Microsoft received more than 5,000 each. An interesting note is that a few of the current major tech CEOs were on H1-B visas after they graduated from a US university. Microsoft’s CEO Satya Nadella, and Google’s Sundar Pichai being examples.

In 2023, US tech firms added over $950 billion in value to the US economy. The tech industry includes software publishers, custom computer programming services, computer systems design, and facilities management companies. Employment in this sector is expected to grow 6% a year over the decade.

It was estimated that H1-B visa holders and their dependants contribute nearly $25billion in federal tax revenue and a further $11billion in local and state taxes annually. Something interesting which I read was that more than 50% of start ups now worth $1billion have at least 1 immigrant founder who will have been on some form of visa at some point. This leads many to believe restricting immigration is anti-growth and innovation and will push growth overseas.

There is no impact on persons already holding the visas or visa renewals, this is only for new applications coming starting September 21^st. Whilst the mega-cap tech companies can absorb the cost of the new visa applications, other industries and small start ups will be hit hardest.

A study published on the National Bureau of Economic Research found that when faced with limiting immigration policies, large global firms still hired the same international worker but offshore 93% of the time. Many of the big tech names for example have global operations and subsidiaries offshore so might choose to hire in a location with more favourable immigration policies. However, for an average sized firm it only hired the same international candidate only 42% of the time.

Other sectors and industries which use the visa programme and for which this could be very damaging for their workforce supply include manufacturing (~10%), education and education services (~8%), and healthcare (~5%). .

Emily Cave – Research Analyst

Hawksmoor Investment Management Limited is authorised and regulated by the Financial Conduct Authority (www.fca.org.uk) with its registered office at 2nd Floor Stratus House, Emperor Way, Exeter Business Park, Exeter, Devon EX1 3QS. This document does not constitute an offer or invitation to any person in respect of the securities or funds described, nor should its content be interpreted as investment or tax advice for which you should consult your independent financial adviser and or accountant. The information and opinions it contains have been compiled or arrived at from sources believed to be reliable at the time and are given in good faith, but no representation is made as to their accuracy, completeness or correctness. The editorial content is the personal opinion of Emily Cave. Other opinions expressed in this document, whether in general or both on the performance of individual securities and in a wider economic context, represent the views of Hawksmoor at the time of preparation and may be subject to change. Past performance is not a guide to future performance. The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations. You may not get back the amount you originally invested. Currency exchange rates may affect the value of investments. FPC25528