The Trump administration’s push to curtail legal immigration is beginning to take effect, and it could hit the tech industry where it hurts. The shift in policy began Friday, when the U.S. Citizenship and Immigration Services released new guidance that entry-level computer programmers may no longer be eligible for H-1B visas—the visa program Silicon Valley uses to recruit highly skilled talent from abroad. (At Facebook, more than 15 percent of employees used a temporary work visa in 2016.) On Monday, the Justice Department warned employers applying for visas not to discriminate against domestic workers, and U.S.C.I.S. released a second memo outlining what it says are measures to detect H-1B visa “fraud and abuse.”
The new set of policies mark a decisive change in tone as the White House moves to translate Donald Trump’s nationalist economic agenda into law. According to the new Citizen and Immigration Services memo, “the fact that a person may be employed as a computer programmer … is not sufficient to establish the position as a specialty occupation.” The agency also said in another statement that immigration officials will begin making “targeted site visits” to “determine whether H-1B dependent employers are evading their obligation to make a good faith effort to recruit U.S. workers.”
A spokesperson for the agency told Bloomberg that Friday’s memo was intended to rescind a dated set of guidelines, and that it does not reflect a change for “H-1B and H-1B1 eligibility in computer-related fields.” But tech founders, C.E.O.s, and venture capitalists in Silicon Valley are worried about what the changes presage for their industry. “All of our early engineers were visa holders; without them we couldn’t have started the company,” Laura Behrens Wu, the C.E.O. and co-founder of San Francisco–based shipping start-up Shippo, told me. “So yes, we’re very concerned about being able to hire the right engineering talent we need.”
Wu, who is currently working to get her own H-1B visa approved, said she is less worried about founders, who she noted will still be able to apply for other visa types reserved for people who have special skills or can raise capital. “But that also means more pressure and less time to try or pivot.”
Venture capitalists likewise don’t seem thrilled about the new guidelines. “One key to the widespread success of the tech industry is the purposeful and relentless recruitment of the most curious and capable minds, wherever they may be found,” David Pakman, an investor with New York-based V.C. firm Venrock, told me. “Accomplished and super-specialized tech talent can be found around the world, and we all benefit when those minds come to work in U.S. and help build our fastest-growing companies. Making that harder is not just bad for the tech industry, it’s bad for the U.S., as those minds will just go build companies outside of the U.S.”
For many tech leaders and entrepreneurs, Trump’s protectionist policies are more than just regressive—they’re self-destructive. “There’s a basic misunderstanding of what powers the American innovation economy. It’s human ingenuity, not coal,” Peter Hebert, co-founder and managing partner at Lux Capital, said. “The tech talent pool that transformed Silicon Valley into an American economic marvel, sending U.S. technology to the entire world, is itself a pastiche of people from the entire world—India, China, Pakistan, Israel. Iran. We’ve been incredibly fortunate over many generations to attract tremendous skills and ambitions to the U.S. to build a better life for the next generation.”
But “talent, like capital, goes where it’s welcome and stays where it is best treated,” Hebert noted. “The administration’s attempt to wall off America from some of the most talented human beings on the planet is both detrimental to our economy and quality of life. They are foolishly protecting the past from the future.”
Not all founders are so worried. Bill Marino, the founder of computer vision start-up Uru, whose employees include one H-1B visa holder, said the visa issue “is something we discussed constantly during our recent round of hiring.” But since the new guidelines seem to only impact entry-level or less-experienced programmers, and Uru tends to deal with machine learning technology, he says his company won’t be impacted. “It seems the new rules are focused on adding an additional layer of scrutiny aimed at showing the roles that are the subjects of the applications are complex and/or specialized,” Marino said. “Any engineering role that we are hiring for in the foreseeable future will fall square into those buckets, so these particular changes to the rules are not worrisome, as is. I do not think this will hamper us in terms of finding talent.”
The bigger problem for Silicon Valley, however, may be that the best and brightest talent will simply stay in their home countries. “I’ve seen two big trends,” Andres Barreto, a serial entrepreneur who came to the U.S. on an H-1B visa and focuses on working with founders to build engineering teams outside of the country, told me. “One, 1 percent of engineering talent in Latin America are now preferring to stay in their country while working for U.S. start-ups remotely. Two, a lot more founders with V.C.-backed start-ups in the U.S. want to build engineering teams outside.” It may be easier for start-ups to maintain remote engineering teams, noted Barreto, who has created three V.C.-backed companies in the U.S., and has invested in 40 other companies.
Trump’s push to keep jobs in the U.S., ironically, may ultimately accelerate the trend of tech companies outsourcing those jobs to lower-wage countries, rather than sponsoring visas to bring those workers stateside. “Just for our fund, we have six Y-Combinator companies that have a product for the U.S. market, but their engineering team is all in Latin America or they are starting to build teams in Latin America,” Barreto explained. Given the latest set of policies coming out of the White House, there’s less reason than ever to relocate.