I will tell you what this video isn't. It is not a critique of the US administration. It is not an emotionally charged reaction to the H1B headlines.

I'm going to do an unbiased take to the best of my abilities. Not right-leaning, not left-leaning.

What happened to H1B is a piece of recent news. It happened. We got to deal with it.

I will start by saying that the reaction to the recent news has nothing to do with the economic reality and everything to do with political tensions in the US.

H1B program has been abused and misused for years.

And most importantly, the tech industry's labor model has already been transformed.

So, while the $100,000 fee feels like a shock, in reality, this change lands quite well in a system that has already moved on.

Let's dive in.

Let's start with a quick summary of what happened. Just in case you missed the news, which I highly doubt, but still.

On September 19th, 2025, President Trump signed an executive order that introduced fundamental changes to the 35-year-old visa program named H1B.

The order imposed a $100,000 fee for all new H1B visa applications.

The previous fees that companies had to pay for every H-1B applications were between5 and $10,000.

The policy took effect at 12:01 a.m. Eastern time on September 21st, 2025. It sent shock waves through Silicon Valley and caused immediate chaos among tech companies and foreign workers.

This video is being filmed on September 28th, 2025. And here is what is confirmed so far.

The change applies to all new petitions filed after September 21st, 2025 for all workers outside of the United States.

This does not apply to current H-1B holders in the United States.

If a company files an H-1B for someone who is outside of the United States, they must pay the fee, whether it's a regular lottery H-1B or one for universities or nonprofits.

The determining factor here is the location, whether you're inside or outside the US.

It is a onetime fee, not a yearly subscription.

and it has an immediate impact on upcoming H-1B lottery.

The next H-1B filing season for the 2027 quota will be directly affected.

Any H1B petition filed in that lottery for an individual outside of the US will require a $100,000 payment.

Employers planning for the lottery should budget accordingly.

And now I would like to invite you to study and critically analyze the data associated with this change.

I think the fact that this became such a shock is a sign of a monumental misunderstanding about how the tech industry's labor model has already changed.

In my personal opinion, this fee changes very little in the current state of the tech industry in the US.

The tech industry has already flipped upside down in the recent years and there are multiple macro events that affected it.

And for the record, AI is not even in the top five of those events.

But it's like people haven't noticed or haven't processed.

So, I'm going to break down why it's actually not that shocking.

Over the past 3 years, there has been a 50% decline in the registrations received for H1B.

When I say 3 years, I'm referring to year 2024 to 2026 because the registrations for 2026 have already been submitted and this was done way before this change came into effect in March 2025.

So this 50% decline is entirely due to pre-existing factors.

As you can see, in fiscal year 2024, 780,000 registrations were received.

In 2025, almost 480 and in fiscal year 2026, 344.

This decline is a result of a perfect storm of policy changes, fraud crackdowns, economic factors, and systematic reforms around H-1B.

Let's break it down. Why did this happen?

Reason number one, the epidemic of fraudulent multiple registrations between year 2020 and 2024.

In July 2024, the Bloomberg published an earthshaking investigation that revealed systematic abuse and numerous frauds that have reached epidemic proportions.

In H1B registration data submitted in fiscal year 2023, there was one individual that was registered 83 times.

Also, in 2023, over 9,000 individuals had five or more registrations.

Bloomberg analysis estimates that roughly 15,500 of allocated visas, meaning one in six were obtained through lottery gaming.

In this case, lottery gaming is when you submit multiple registrations for one person.

Now, there is something you need to know about Indian agencies that supplied workers to the United States.

But just in case you're unfamiliar with the significance of Indian firms in the context of H-1B, here is why it's important.

Here is the demographics of people who obtained H-1B visas.

Indian nationals hold around 71% of all H-1B visas.

The second largest group is Chinese nationals.

The third largest is Canadian nationals.

But Canadian nationals have another path into the US, which is the TN visa.

So, they're not going to be the subject of this conversation.

Now, let's look at the H-1B usage pattern by American tech enterprises.

The companies that benefit the most from H-1B visa holders are big tech and other tier 1 American enterprises and consulting firms.

Now for the Indian nationals and remember that is 71% of all H-1B visas. 25% of them are sponsored by major Indian IT service companies.

Here's how it works. For example, Indian IT firms like these hire skilled engineers and tech professionals within India.

Then these companies act as H-1B visa sponsors, meaning that they file visa petitions on behalf of the workers that they employ.

They negotiate the contract. They negotiate the salary in the US and they supply the talent to the US company.

The contract negotiation happens between an Indian consultancy and the US company that hires the talent, not between the individual who gets the job.

Now the remainder of H-1B visas are sponsored either by American companies directly or perhaps universities, startups or other employer types.

But this 25% figure which is the number of people sponsored by IT consultant firms is quite sizable for H-1B because Indian IT firms are the largest employer group category under H1B.

So going back to the problem of multiple fraudulent registrations, what Indian consulting firms that supplied workers to the US would do is they would create multiple companies with similar names and shared addresses.

They would submit the same worker multiple times under different company names and that would significantly increase their chances at lottery wins.

While legitimate companies get fewer than half of their requested visas, they would then rent out H-1B workers to major US giants like Amazon or Google and take 20 to 30% of their pay.

Bloomberg also found out that the HCL Technologies, which is an Indian IT consulting company, allegedly underpaid H-1B workers by $95 million.

Before filming this video, I posted a community post on YouTube asking you guys to drop your questions.

So, I will be responding to most of them as we go through the video.

Here is one of them. Indian workers were given carrots for working on shore.

Now, based on everything I just said, to be objective, it is important to understand why they were paid carrots.

Both US companies and Indian consultant companies benefited from this.

America hired workers with the necessary qualifications for less and Indian agencies rented out their own people for less.

Now the tech workers who wanted a chance at an immigration took those offers which were carrots and went.

So it's a win-win for the companies but the worker is the one who gets screwed.

Reason number two, in response to these frauds, in 2025, the US citizenship and immigration services introduced the beneficiary centric selection reform to fight the fraud.

The reform introduced the following changes. Each unique person gets selected only once regardless of how many employers register them, which basically means that the incentive for multiple registrations was eliminated.

As a result, right after this reform, there was a 38.6% 6% decline in registration in the following year.

Reason number three, tech industry layoffs and reduced demand.

In the past 3 years, the tech industry went through unprecedented job cuts as a result of extreme overhiring during pandemic.

I dedicated several videos to this topic, explaining why the layoff crisis has nothing to do with AI and everything to do with overhiring correction.

So, if you'd like to understand the reasons why, check these out.

But because of those layoffs, H-1B holders got particularly affected.

The ones who got laid off face 60-day deadlines to find new sponsors or leave the country.

Companies became reluctant to sponsor new H1B workers while laying off existing staff.

And to top it off, Microsoft got caught in a wave of backlash and criticism because they requested 4700 H1B visas while laying off 9,000 employees.

Reason number four, remote work and outsourcing.

The decline in relocating workers to the US was already happening since before the pandemic when companies realized that a lot of work and especially technical work could be done remotely.

Pandemic did not cause it but it significantly accelerated the shift.

The pandemic provided the proof of concept if I may that skeptics needed because today three to four times more tech workers are remote compared to 2019.

A quick example from my personal experience, product and product management has been historically one of the safest jobs of all when it came to offshoring because PMs are almost always on site.

When I say on-site, I don't necessarily mean that they're in the office, but they're usually in the country where the product is being sold.

But even for product and I'm seeing this in my career like over the past 5 years for example I have seen both my colleagues and myself being replaced by offshore talent after we left.

The tech industry has already shifted away from visa dependent hiring several years ago.

There is sufficient data that confirms that this transformation was accelerating regardless of immigration policy.

Remote work became the norm, not the exception.

97% of tech companies today offer either remote or hybrid options.

Global IT outsourcing market is 731 billion in 2025.

74% of all global outsourcing is now IT services.

The top seven Indian firms that provided talent to the US companies reduced H-1B usage by 56% over the past eight years because the western market had already begun switching to the outsourcing model instead of H-1B hiring.

They did it gradually but they've been doing it for a while.

In 2025, for the top 10 Indian consulting companies that provide IT services, H-1B workers represent less than 1% of their entire employee base.

And for the US enterprises, Amazon alone has 1.5 million employees globally.

Their 12,000 people on H-1B represent less than 1% of the entire workforce.

Even before Trump's fee, the economics were shifting against H-1B as a whole.

And here's why. A typical H-1B tech worker at an Indian firm earns around $15,000 annually while generating between 150 and $200,000 in billings.

This produces only $15 to $20,000 a year in annual profit and that's a 10% margins.

The previous H1B fees between $5 to $10,000 were already eating into those margins, let alone 100K.

Now, let's quickly come back to your comments.

Here's one of them. hiring talent overseas and increasing US jobs are two unrelated events because there is nothing that prevents the US from doing it now.

It's the remote hiring that affected the decline of H-1B, not the other way around.

And another good comment about subsidiaries.

They do open them and they do funnel work through them.

As you know, all big tech and tier 1 enterprises have been opening and shifting multiple resources to other countries.

Just a few examples, Canada, Ireland, England, and Germany.

There really is no reason for a worker to be physically present in the US, especially if all of the teams that they're working with are offshore.

All of this brings me to my final point.

Current rates for offshore technical work make the $100,000 fee almost irrelevant from the economic standpoint for the US.

In India, the rate is between $18 and $40 per hour for full stack developers.

In Eastern Europe, between 25 and 149 per hour.

In Latin America, the rates are not only competitive, but also with US time zone alignment.

A company paying an offshore developer $50 an hour, which is $100,000 total, can avoid both the H-1B fee and the higher US salary while getting the same work done.

Now, to that you may say, what about all the people who considered H-1B a path to immigration?

And to answer that question, I would like to pause and bring you back to the initial purpose of the H-1B program.

The whole point of H1B from its inception was that it was always meant to be for highly experienced and distinguished individuals.

H1 visa category was created by the immigration and nationality act for foreign workers and distinguished merit and ability in the 50s.

In the '90s, President Bush introduced a subgroup in the H1 visa category called H1B and it was created for workers with specialty occupations and distinguished ability.

I would like to thank the author of this comment for suggesting the report that I'm going to reference in this section.

There are four levels of job complexity and each level is defined by the value that this job is going to bring to the enterprise and the value is defined by the proposed salary.

As you can see, the minority of registrations were filed at level four while nearly half were filed at level two.

On top of that, 15.4% 4% of all applications were filed at level one, the lowest possible wage tier.

From these two charts and the rest of the report, it becomes pretty evident that the H-1B program was not used to attract top tier global talent as it originally intended, but to fill the roles at below median wage levels, which goes against its stated objectives.

On this chart, you can see that the H-1B wage distributions are systematically lower at every percentile point, which may suggest that the employer practices in H1B sponsorships do not go in line with the objective of the program.

The majority of H-1B positions fell into the lower wage levels one and two, which creates economic advantage for US companies to favor H-1B workers over similarly skilled US workers.

But this is not what the program was built for.

H-1B program was created by the US to support the interests of the US in finding highly skilled talent to fill talent shortages.

This was meant to be the path only for highly experienced people.

The reason this program has collapsed, well, not fully, but you know what I mean, is because it was abused by both US enterprises as well as foreign agencies in the countries that supplied H-1B talent.

Okay, now that we've covered H-1B and macro changes in the tech industry, let's understand what this really means.

If you study the boring data around H1B fee controversy, you will understand that the decline of H-1B was inevitable.

The global tech industry has fundamentally changed its operating model and physical location matters far less than it did even 5 years ago.

This fee makes H-1B a less desired path for immigration.

As in, of all the ways that you can pick to move to the US as a tech worker, H1B is going to be a lot less popular.

But it is not going to be a problem from the economic standpoint for the US.

The transition was already happening and H1B dependency was declining.

Remote work provided more economically viable way to hire talent rather than bringing workers in the US.

Global talent access and the quality of global talent improved through direct outsourcing.

And lastly, cost savings for the US were dramatic even before the fee.

The surprise reaction shows how political noise contradicts economic realities.

Quickly coming back to the comments now in regards to the students.

Yes, it is absolutely true that the students depending on the H-1B visas after graduation are among the most affected groups.

Many international students rely on the H-1B pathway to transition from the F1 student visa and the data confirms that a significant chunk of H1B visa holders were previously on F1.

On the positive side, I am pretty sure that the US government will make certain exceptions or special programs for academic jobs or people who graduated masters or PhD level programs in the upcoming months.

But at the same time, I got to admit that of all the people who got affected by the H-1B changes, students are the ones who are going to have a very hard time staying in the US.

Now on the other hand, if you have graduated from an American university, especially if it's a university with a big name, Canada, Europe, and Asia will gladly take you.

But yeah, if we talk about the possibility of staying in the US long term, it is going to be much harder.

This comment here that this move is against the interest of the US to attract the best minds.

This is probably the only point that I personally disagree with only because there are multiple other ways to attract the best talent.

There is L1, there is 01, there is TN, there is satellite office hiring.

There are multiple ways of bringing people into the US or having them do the work for the US companies outside of H1B.

Now there is this famous saying that there is no Silicon Valley without H-1B which is true because the impact and the amount of innovation and talent that other countries have given the US cannot be underestimated.

But when it comes to Silicon Valley and H1B in my view H1B is being used here fairly loosely.

H1B in this case is like an umbrella term for all immigrants who came to the US who brought their talent to the US to build something that they weren't able to build back home.

So it's not so much about H1B in particular. It's also 01 and L1 and TN and all other kinds of visas that exist out there that would allow you to get into the US as a tech worker.

And lastly, let's talk about what this means for global tech diversification, specifically in Canada, Europe, and Asia.

Starting with Canada, Canada already operates a dedicated program allowing up to 10,000 H1B visa holders to apply for Canadian work permits annually.

Canadian work permits can be processed in as little as 2 weeks through the global talent stream.

Unlike the US, spouses of foreign workers automatically receive work permits in Canada.

There's been a lot of questions asking whether people are going to pick Canada over the US.

Yes, there is going to be interest, but let's talk about it in detail because it's not going to be straightforward.

The changes to H-1B do open a window for Canada to attract STEM talent with work experience from the US and support population growth and economy for lots of tech workers in North America and this includes Canadian born, Americanborn and foreignb born people.

Canada has a reputation of being an option B if America doesn't work out.

Having lived in Canada for many years, of all my network in tech, the people who would typically pick Canada over the US would be the ones with very strong political or ideological views.

For example, it's very common to hear from people who have kids to hear that they would be scared of gun violence in the US and that's why they prefer Canada.

But people who don't have very strong views would happily go to the US.

It can be either in a form of complete relocation.

It could be that they're still located in Canada but working for the US enterprise and going back and forth.

It could be that they're completely remote but working for a US salary.

Point is the US salary is a dream for a lot of people in Canada.

But since we're talking about countries and the fact that H-1B is no longer working in the interest of the US, it is only fair to think about the same problem from the interest of Canada.

when a Canadian builds a software, a product, anything really that is tied to a foreign intellectual property. So in other words, if a person in Canada is working for a US company or reports to head offices outside of Canada, the intellectual property stays outside of Canada and does not contribute to the country's long-term innovation strategy.

I spoke about intellectual property crisis in Canada in this video at length. Check it out if you're interested.

And this doesn't solely apply to Canada.

It's just in Canada, we have a pretty big crisis with that.

But the point I'm trying to make is that if Canada wants to use the opportunity to attract STEM talent that cannot stay in the US, we cannot solve this problem by simply opening an equivalent of H-1B and being like, "Yep, come in and work for the US enterprises."

We have to offer a better alternative for the people who come here to have reasons to stay even if this shift with H-1B gets reverted 5 years down the line by the next US government.

On top of it, the infrastructure reality check.

Canada has introduced significant constraints to the immigration system.

Starting 2025, Canada reduced annual immigration levels by 20%.

Bottom line, if Canada wants to take advantage of the changes caused by H-1B, instead of being an American satellite or a constant option B if America doesn't work out, there needs to be a thoughtful and comprehensive program designed to benefit Canada before everybody else.

a program that will protect Canadian intellectual property, get VC money to Canada, and have people stay here even if something changes in the US.

For now, the Canadian government has been silent, but then it's only been a week.

We'll see what happens next.

A few words on Europe.

For years, probably decades, to anyone working in big tech or tier one tech in the US or even Canada, Europe was never really considered an option.

maybe London, perhaps Dublin only for fang, but Europe has always been considered like a bit of a step back after the US or Canada.

However, with the recent geopolitical shifts of the past 5 years and the post-pandemic post layoff AI first economy, the UK is surprisingly emerging as a major beneficiary despite Brexit related talent outflows.

Germany is also positioning itself as the primary H-1B alternative in Europe through multiple visa programs.

In this specific video, I'm not going to drill into the whole tech situation in Europe because I made a series of videos analyzing various tech markets in post-pandemic post layoff AI first economy and covered multiple markets in Europe and the Gulf region.

You're welcome to explore those.

Long story short, we are indeed at a point where there's going to be a stronger diversification of tech hubs across Canada, Europe, and Asia.

Before we wrap up, a few more questions that you guys dropped.

Is this change reversible?

Personally, I don't think so.

I don't think it will be fully reversed.

It is very possible that it will be corrected or some new clauses introduced or perhaps some new programs for students who graduate universities this year or next year.

But given the patterns of the current US administration and the fact that H-1B program in and of itself was extremely flawed, I do not think that it will be reversed.

And if anything, if they decide to change it, I think that they should introduce a different program altogether.

But again, this is just my opinion.

Will this erode US's technology advantage?

I personally would say that I don't think that it is a guaranteed erosion.

I mean despite what happened, the US has very strong systematic advantages.

It has universities. It has unmatched VC scene, capital, infrastructure, large tech firms and that culture, that real tech culture.

I do not think that the US will lose its advantage on the global scale.

But instead, again, in my opinion, I think that what has happened to H1B is a signal of global diversification and the fact that US is no longer the only place to be if you're in big tech and want to make really good money.

Given how flawed H1B was, it is very possible that an alternative program will be introduced.

And also, let's not forget about L1, 01, and TN.

Also, lots of tech companies are shifting work to satellite offices or outsourcing globally.

So again to me personally this does not sound like an erosion but rather a sign of global diversifications which is actually happening not only on the tech level but on the global geopolitical level where US is no longer the biggest superpower.

And that's a wrap for today's episode.

I covered as much as I could without deviating from the subject.

So for any questions that I haven't covered I will either take them up in future videos or respond in comments.

As always would love to hear what you guys think.

Thank you for listening.

Till next time.

Bye.