Infosys Stock Drops 4.5% Following Trump’s Proposed H-1B Fee

Infosys experienced a significant decline in its stock price, dropping as much as 4.5% on September 19, 2023. This downturn followed reports that President Donald Trump is expected to sign a proclamation imposing a $100,000 fee for H-1B visa applications. Investors are expressing concern that the proposed fee could severely impact the business models of companies heavily reliant on the H-1B visa program.

The proposed fee marks a substantial shift from the current pricing structure for H-1B visas, which are widely used by technology and consulting firms to employ skilled foreign workers. Alongside Infosys, other major users of the H-1B program also faced stock price declines. Cognizant Technology saw a drop of 4.3%, while Accenture fell by 1.3% after the announcement.

Implications of the Proposed H-1B Visa Fee

The Trump administration’s initiative aims to address perceived abuses of the H-1B visa program, which the administration claims has led to the displacement of American workers. According to a report by Bloomberg News, a White House official indicated that the proclamation could be signed as early as Friday, thereby mandating that companies seeking H-1B visas submit the hefty fee alongside their applications. This move is intended to act as a deterrent against companies that frequently utilize the program to bring foreign workers into the United States.

The potential implications of this policy change are particularly significant for Indian IT services companies like Infosys. These firms have historically been among the largest sponsors of H-1B visas, using them to staff projects in the U.S. The proposed fee increase directly targets this practice, raising questions about how companies will adapt their operational strategies in response.

Broader Context of Immigration Policy Reform

The introduction of the H-1B visa fee is part of the Trump administration’s broader efforts to reform immigration policy, particularly employment-based visa programs. The administration has focused on policies aimed at prioritizing domestic employment opportunities, which have garnered both support and criticism. The proposed fee increase follows a series of measures targeting skilled worker immigration, indicating a clear intent to reshape the landscape of foreign worker recruitment in the United States.

Investors in the technology sector are closely monitoring these developments, as changes to the H-1B visa program could have significant ramifications for operational strategies and profitability margins of major firms. As the situation unfolds, the potential for further policy adjustments remains a critical point of interest for stakeholders in the industry.