H-1B visas in 2025: Employment solution or million-dollar barrier?

Hi everyone,

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After President Trump’s new regulatory sanctions on the H-1B visas, I wanted to create a deep dive to portray the history, challenges, and provide alternatives. A paper that hopefully adds value to my LinkedIn community, with a take grounded in hard data and plausible solutions that I personally haven’t seen/read. 

H-1B Visa Regulations: Tariffs for People?

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A Brief History Few Talk About

The H-1B visa program was created in 1990 with a simple idea: let U.S. companies hire skilled foreign workers to fill gaps the domestic labor market could not cover.

Some facts most people don’t highlight:

• At any given time, there are 500K–600K H-1B workers in the U.S.
• By law, each must earn at least $60,000/year — a safeguard against wage dumping.
• Over time, the program shifted: ~65% of H-1Bs today are in IT roles. In 2003, that number was only ~32%.
• ~70% of visas go to Indian nationals, making the U.S. tech sector heavily dependent on one country.

Originally, H-1Bs were spread across industries (healthcare, engineering, research). Now, they are almost exclusively a tech talent pipeline. This concentration is both the program’s strength (solving acute gaps) and its weakness (over-reliance on one mechanism, one region).

The New Regulation

In September 2025, the U.S. introduced a $100,000 fee for every new H-1B petition.

• Before: $215 registration + ~$2-4K filing fees.
• Now: $100,000 per new petition (renewals/extensions are exempt).
• Increase: ~46,000%.

Effectively, this turns new H-1Bs into a luxury permit. Even for companies that can pay, they’ll only use it for the most senior or mission-critical hires. For everyone else, this is a de facto visa freeze.

Industry experts already warn the fee makes H-1Bs “accessible only to the wealthiest corporations.” For startups and SMBs, it’s simply not realistic.

H-1B Distribution: Who Uses Them

The program’s weight is not evenly distributed.

• By Country:
  
  • ~70% India, ~10–12% China, the rest scattered across Canada, Mexico, the Philippines, etc.
• By Company:
  
  • Amazon (including AWS): 12,000+ approvals in H1 2025.
  • Microsoft, Meta: ~5,000 each.
  • Infosys, Tata Consultancy, Cognizant: thousands each year, mainly Indian IT services firms.

This shows the split: Big Tech and Indian IT services dominate H-1B usage. Startups, SMBs, and specialized firms account for only a small share, and they’re the ones who will be pushed out first.

Strategic Shifts

With the $100K H-1B fee, companies are being forced to rethink how and where they access talent. Here’s what’s next:

AI Is Changing the Value of Proximity

For years, Big Tech justified the higher cost of bringing H-1B engineers to the U.S. instead of leaving them in India because they wanted them embedded with product teams. Having engineers side-by-side with designers, PMs, and leadership allowed for faster iteration and seamless collaboration, worth more than the savings of keeping them offshore.

Now, with AI automating much of the basic engineering work, the real value comes from engineers who are product-facing: those who understand the user, can iterate quickly with cross-functional teams, and dominate the product layer.

The challenge: under the new $100K visa rules, relocating this type of talent to the U.S. is no longer feasible. Scaling teams in India is possible, but time zone misalignment and distance erode the closeness required for true product expertise.

This is exactly why Mexico is a strategic alternative. It offers the scale and skills of a global hub, but with real-time collaboration and cultural proximity that enable engineers to fully integrate with U.S. product teams. In other words, nearshore hubs in Mexico give companies the product closeness that H-1Bs once delivered, without the regulatory burden or cost.

Big Tech: Selective and Strategic

• Giants like Amazon, Microsoft, Meta, and Google will still use H-1Bs, but only for must-have roles (AI researchers, PhDs in specialized fields, principal-level architects).
• For volume hiring, they’ll lean more on their global engineering hubs:
  
  • Amazon already has 40,000+ employees in India.
  • Microsoft runs large-scale centers in Hyderabad and Bangalore.
  • Google has expanded in Mexico City and Guadalajara over the past five years.
    
    
• Bottom line: Big Tech adapts. Their scale and global presence let them offset H-1B restrictions without much pain.
  
  

Indian GCCs: Doubling Down Locally

• Multinationals with Global Capability Centers (GCCs) in India will scale those operations further instead of relocating talent to the U.S.
  India remains the world’s largest IT labor market with 5M+ engineers, and the $100K fee only strengthens its role as the offshore default.
• However, the time zone gap and fierce competition for senior talent mean India is not always the right answer for SMBs. The biggest employers (TCS, Infosys, Wipro) absorb much of the supply.

Outsourcing Firms: A Temporary Winner

• IT services providers like TCS, Infosys, and Cognizant may see a bump in demand, as U.S. firms that relied on H-1Bs turn to outsourcing.
• But these firms will avoid filing new H-1Bs themselves (a $100K fee wipes out their profit model). Instead, they’ll keep delivery offshore.
• Net effect: U.S. companies get access to talent, but not in the U.S., which undercuts the original purpose of innovation centers.

Nearshoring: The Growth Frontier

This is where the real shift happens. For many U.S. companies — especially SMBs — the logical response is:

Don’t move the worker to the U.S.,  move the work closer to the worker.

• LATAM is now the fastest-growing region for tech nearshoring.
  
  
• Mexico is leading the way: U.S.-aligned time zones, English-proficient engineers, and a mature ecosystem built over decades by Intel, Oracle, IBM, and now Amazon, Google, and Uber.
• Nearshoring solves the two biggest H-1B problems at once: cost (no $100K surcharge) and collaboration (real-time alignment).

Why Mexico Is the Real Alternative

This is where I move from analysis to my take as Chief Growth Officer at Codifin.

Mexico by the Numbers

• ~700,000+ software engineers currently in the market.
• 130,000 new STEM graduates/year, growing faster than in the U.S.
• 300,000+ bilingual engineers (C1) with proven experience in global teams.
• #1 in LATAM for English proficiency in tech (EF EPI, 2024).
• 40–60% lower salaries vs. U.S. equivalents, without the compliance and visa costs.

Strategic Advantages for U.S. Companies

1. Real-Time Collaboration
   
   • Same or overlapping time zones. No 12-hour delays like India.
   • Agile work, daily standups, and client interactions happen in sync.
     
     
2. Faster Setup and Scale
   
   • A nearshore GCC in Mexico can be operational in 3–6 months, versus 12–18 months in India.
   • Lower minimum scale, SMBs can start with 10–20 people, not 200+.
     
     
3. Retention Advantage
   
   • Mexico’s top engineers are attracted by international projects but don’t necessarily want to relocate permanently.
     U.S. SMBs can position themselves as attractive employers by offering career growth without emigration.
     
     
4. Proximity and Integration
   
   • Flights from U.S. hubs to Mexico take 2–4 hours.
     Easier face-to-face collaboration, executive visits, and team-building.
     
     
5. Regulatory and Trade Support
   
   
   
   • Under USMCA, professional collaboration is streamlined, and certain cross-border assignments qualify for TN visas, which are simpler than H-1Bs.

Why SMBs Should Move First

• Big Tech already has Mexico hubs. Amazon, Microsoft, and Oracle have expanded aggressively into CDMX and Guadalajara.
• SMBs have a window of opportunity: by acting early, they can tap into the best talent pools before they get saturated.
• With margins under pressure and H-1Bs blocked, nearshoring to Mexico is the most cost-efficient way to compete.

Codifin’s Position

At Codifin, we believe this is the inflection point.

• For 25 years, India has been the global default.
• But with the new H-1B rules, Mexico is stepping into that role for North America.

Our take is simple:

• Don’t chase visas.
• Build where the talent already is.
• For SMBs and mid-market firms, Mexico offers the right mix of scale, quality, cost, and proximity.

This is not a short-term patch; It’s a strategic reset. The companies that make the move now will secure the best talent, integrate seamlessly, and protect their margins.

At Codifin, we’ve built our business on helping clients do exactly that: design, launch, and scale nearshore GCCs in Mexico that deliver results.

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Sources

• Boundless Immigration (2025)
• Reuters (2025)
• Economic Times (2025)
• USCIS Data Hub (2024)
• CompTIA Tech Jobs Report (2024)
• Washington Technology Alliance (2024)
• Texas Higher Education Coordinating Board (2023)
• Nearshore Americas (2025)
• TechCrunch (2024)
• EF English Proficiency Index (2024)
• BairesDev (2024)

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