Is a boom in skilled immigration into the U.S. reversing? Barclays weighs in.

Barclays analysts report a significant reversal in U.S. skilled immigration, with new visas for skilled workers currently running 25% below 2024's record 200,000, and H-1B visas specifically at 104,000 this year. This decline, driven by proposed Trump administration policies including a potential $100,000 annual fee for new H-1Bs and a shift to merit-based selection, is expected to further reduce H-1B volumes by at least 30%. While large tech firms are largely unaffected, outsourcing, consulting, research, and education sectors are experiencing more pronounced impacts, signaling broader implications for labor supply, innovation, and workforce strategies, particularly in tech, pharma, and healthcare.

Analysis

According to a research note from Barclays, U.S. skilled immigration is undergoing a significant reversal after reaching a record high of 200,000 entrants in 2024. New visas for skilled workers are currently running approximately 25% below that peak, with new H-1B visas tracking at around 104,000 this year. This downturn is attributed to proposed policy shifts by the Trump administration, including a potential $100,000 annual fee for new H-1B visas and a change from a lottery to a selection system favoring higher-paid workers. Barclays' research suggests these proposals, if enacted, could drive new H-1B volumes down by at least another 30%. The impact is not uniform across industries; while large technology firms are reported to be 'largely unaffected' so far, the decline is 'more pronounced' in outsourcing firms, consultancies, and institutions in research and education. Compounding this trend is a 10% drop in participation in a key program allowing international students to work post-graduation. This overall shift carries significant implications for labor supply, innovation, and workforce strategies, particularly for the technology, pharmaceutical, and healthcare sectors.

Key Decisions for Investors

• Investors should review exposure to IT outsourcing and consulting firms, which face the most immediate and pronounced risk from the sharp decline in H-1B visa availability.
• While the broader tech sector faces headwinds, large-cap technology companies may offer relative stability, as the analysis indicates they are currently less affected by the visa pullback than smaller competitors and service providers.
• It is critical to monitor the legislative progress of the proposed H-1B rule changes, as their implementation would likely serve as a major catalyst for repricing equities in labor-dependent sectors such as technology, pharma, and healthcare due to rising labor costs and a constrained talent pool.