usa, net profit, IT company, H1B visa, Business news

The new policy of H1B visa will reduce the profitability of IT companies.

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Information technology companies (IT) may have to suffer substantial losses due to recent changes made to the US by H-1B visas. Under the new policy, only those who have graduate and above degree have been offered priority for H-1B visas, which can reduce the number of H-1B visas.

In December 2018, United States Citizenship and Immigration Services (USCIS) has proposed to reverse the process for H-1B visas and prioritize advanced degree holders.

Credit rating agency Icra said that this will reduce the number of H1B visas for 10 percent of the regular applicants.

Rating agency said that with the recruitment of American candidates on higher salary, pricing pressure on commoditized services, wage inflation and reduction in income growth will have negative impact on companies’ profits.

Although companies have other factors to reduce these effects, however, operating profit is expected to decline from 22.1 per cent of the financial year 2017-18 to 20.8 per cent in the fiscal year 2020-21.