Core Insights - The new $100,000 fee for H-1B visa applications, introduced by the Trump administration, has raised market concerns but is expected to have limited operational impact on IT service companies [1][2] - Future legislative pressures may reshape the business models of the IT services industry, with companies likely prioritizing domestic hiring while maintaining offshore delivery to control costs [1][3] Group 1: Short-term Impact of New H-1B Policy - The new H-1B visa fee applies only to new applications submitted after September 22, alleviating initial market fears regarding existing visa holders [2] - Companies heavily reliant on H-1B visas, such as Cognizant (CTSH.US), experienced stock price declines, but the actual operational impact is deemed manageable in the short term [2] Group 2: Shift Towards Domestic Hiring - IT service companies, including Accenture (ACN.US) and Cognizant, are reducing their reliance on H-1B labor due to legislative pressures, with H-1B approvals for these companies expected to drop by 52% by 2025 [3] - The high visa fee is anticipated to encourage companies to hire domestically, as most required skills are available in the U.S. labor market, making local hiring more cost-effective despite potential salary increases [3] Group 3: Financial Implications - A stress test by Morgan Stanley indicates that if Cognizant maintains its H-1B approval volume of 2,500, the additional cost would be $250 million, representing 1% of revenue and approximately 7% of adjusted operating profit, although this scenario is considered extreme [4] - For Accenture, maintaining 1,600 H-1B approvals would result in an additional cost of $157 million, only 0.2% of revenue and about 1.4% of adjusted operating profit, indicating minimal overall impact on profitability [4]