Another Talent Exodus From The US

The Real Estate Espresso Podcast

Another Talent Exodus From The US

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Another Talent Exodus From The US

Welcome to the Real Estate Espresso Podcast, your morning shot at what’s new in the world of real estate investing. I’m your host, Victor Menasce. On today’s show, we’re talking about the impact of the newly announced fees associated with the H-1B visa to the United States.

Historically, the U.S. has admitted about 65,000 H-1B visas per year with an additional 20,000 visas for those who hold advanced U.S. degrees. Anytime there’s a major policy shift, the marketplace will adapt, and find new ways to optimize the allocation of talent. Silicon Valley was cited as one of the main reasons for the policy change.

Now, if you’ve been following the show for a while, you’ll know that I do have a tech background, and I was vice president of engineering and chief technical officer at AMCC, which had its headquarters in Sunnyvale, right in the heart of Silicon Valley. I spent considerable time there.

My engineering organization had 13 design centers all over the world. I had staff in India and in Manchester, in the UK, two locations in France, as well as several locations across the U.S. and Canada. We did make some use of the H-1B visa but not in large numbers.

The newly assessed fee for the H-1B is not a one-time fee but an annual fee, and once an organization has built a relationship with a skilled individual, that job often can be relocated outside the U.S., with little impact on overall productivity.

Can you imagine for a moment that you’re the head of an HR department at a major corporation like Google or Hewlett Packard or IBM? The most important consideration is that your remote employees are able to participate in videoconference meetings during core business hours. If your office is in Seattle or San Jose, you’d be willing to relocate some of your staff to Vancouver or Toronto or Ottawa. If you knew this was going to save you $100,000 a year per individual, you’ll now be paying those employees in Canadian dollars versus U.S. dollars, and you get to save in multiple ways with almost no loss of productivity.

Now, the tech industry has seen some significant layoffs in the last year. Companies like Microsoft, Amazon, Google, Facebook have all released tens of thousands of people in the last year. The policy change will definitely see some of the laid off workers maybe getting rehired, and those international workers who were previously covered by a visa, now a very expensive visa, being sent home to their country of origin.

The tech industry does not require most specific job functions to be tied to a geographic location. If the job function is in support of say a newly constructed factory, maybe a semiconductor lab, then yes that job will not be easily relocated, but for the rest, if they’re involved in software development, companies will exercise the flexibility to move those jobs outside of the U.S.

The largest user of H-1B visas is Amazon, with over 14,600 visa holders. At 100,000 a year, that would cost an additional $1.4 billion in fees to the U.S. government. I personally would be surprised if any company would just roll over and pay for an additional higher than $1.4 billion in fees. The top users are Amazon, Tata Consulting services from India with about 5,500 people, Microsoft with a little over 5,100, Macca with about 5,100, and even Walmart has about 2,400 people with H-1B visas.

When I ran the engineering organization, we didn’t use H-1B visas to import labor per se. We used the program to bring a few people from some of the remote design centers, immerse them in the culture of our Sunnyvale office, so they could in turn return to their home design center and cross-pollinate the culture across the organization. It gave that individual a foreign expat assignment, and at the same time, improved the cohesion of the different design centers across the world. They would later return to the remote design centers.

Now, I would bet that Walmart would move those positions to their software design centers located either in Toronto or Ottawa, and save the $239 million dollars with zero loss of productivity.

Unfortunately, right now, the other large user of the H-1B visa has been, in fact, the medical industry where doctors completing their residency as part of their medical training have had to transition from a student visa to an H-1B for a period of their residency. And during residency, a doctor-in-training does receive a salary, but it’s pretty low compared to what they would be earning when fully licensed. There is no way that a hospital is going to pay $100,000 a year on top of a medical resident that might only be earning $55,000 a year in salary. The proposed change could result in major disruptions to the nation’s healthcare system.

Now, of course, this is a real estate podcast, not an Immigration Law Podcast. If I put myself back in the mindset of VP of Engineering in my prior tech career, I would be looking to immerse people from our remote design centers over a shorter period of time. I would probably look to utilize the B-1 visitor visa which has a 6-month time limit and zero cost. These employees would continue to be employed in their home country. When H1B employees would not be working in the U.S., they would be consulting with business associates. It does not allow for local employment or work for hire in the U.S.

Now, some companies have tried to skirt the rules. The use of 475 workers at the Hyundai battery plant in Georgia with temporary business visas were being used for the construction of the plant. That feels to me like an abuse of the temporary visa from a distance. Although, I’m not close enough to the situation to be able to comment on it with any authority.

I personally believe that the use of the H1B visa is going to drop to nearly zero with the imposition of this new policy. And that means another 100,000 people in high-paying jobs are likely to leave the U.S., probably within the year. These people will continue to work for the same company in their country of origin as long as they are individual contributor. If they are in a managerial role, then the relationship gets more complicated. I truly can’t think of too many companies that would be willing to pay that $100,000 fee for the visa.

So, this year 2025 was the first year in which the U.S. population shrunk in almost 100 years. And shrinking population means shrinking economy—especially when you consider that 70% of GDP is based on consumption.

As you think about that, have an awesome rest of your day. Go make some great things happen. We’ll talk to you again tomorrow.

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