Why the US ending the H-1B lottery is unsettling Silicon Valley and beyond

For more than two decades, the H-1B visa lottery served as a quiet stabiliser for the US technology economy. Its randomness was not flawless, but it still provided businesses with something they value very highly: Predictability. Corporations would be able to chart recruitment cycles, educational institutions could synchronize the graduation of their students, and worldwide engineers would be able to organize their professional development in a fairly predictable manner. Over time, this rhythm became embedded in how the tech ecosystem functioned.

That equilibrium is now under strain. Beginning February 27, 2026, the US will replace the lottery-based allocation of H-1B visas with a wage-weighted selection model, one that gives higher-paid applicants a greater likelihood of being chosen. The stated aim is to reward skill and compensation. The unintended consequences, industry leaders warn, may be far more disruptive.

A shift from chance to pay

Under the revised framework, H-1B applications will no longer be treated equally. Instead, wage levels will determine how many “entries” an applicant receives, tilting the odds toward those offered higher salaries. US authorities argue this will ensure visas go to the most highly skilled professionals.

On paper, the logic is straightforward. In practice, critics say it risks narrowing the talent pool. High salaries are often concentrated in large firms and major tech hubs, potentially sidelining mid-level professionals, specialised roles, and companies operating outside top-paying regions.

Nasscom raises red flags

India’s IT industry body, Nasscom, has cautioned that the change could upend long-standing workforce strategies, especially for smaller and mid-sized firms, according to media reports.

“A sudden shift to a wage-weighted model would introduce uncertainty, increase compliance complexity, and disrupt long-established workforce planning,” Nasscom said, noting that many companies synchronise hiring with academic calendars, client commitments, and product rollouts.

The association also warned that regional wage disparities could distort outcomes. Roles that are critical but not top-paying, particularly outside Silicon Valley, may struggle to compete under the new system.

Part of a broader policy reorientation

The H-1B changes are closely linked with the rest of the US immigration policy changes under the Trump administration. A few months ago, a proposal for $100, 000 yearly fee for some H-1B holders caused lawsuits. On the other hand, the government introduced a $1 million "gold card" visa, promising the fastest way to citizenship to rich investors.

These decisions, when viewed together, indicate a direction change very clearly: the routes to immigration are more and more determined by the income of the person. While the door is being kept open for high-wage talents and capital, the middle, skilled workers seem to be getting less and less access.

Uneven impact across the industry

Large tech companies have the capacity to adjust to the shift more easily. Amazon still tops the list of H-1B approvals, and companies like Tata Consultancy Services, Microsoft, Apple, and Google come next. California continues to be the major receiving area of H, 1B workers, which is a reflection of both the wage levels and the concentration of corporations. The new model, however, brings a whole new set of challenges for small businesses.

Business objectives that were once solely determined by statistical probabilities need to incorporate wage benchmarks, compliance adjustments, and the option of waiting. The risk of project timelines and client deliveries, in particular, those that are highly dependent on specialised international talent, being interrupted is present.

Calls for a phased transition

Nasscom has recognized these risks and therefore appealed to the US authorities to delay the implementation till the FY 2028 lottery cycle. In its view, a slow and steady rollout would give enterprises the opportunity to adjust their recruitment strategies, reconfigure their compliance systems, and thus not be taken by surprise in terms of their talent pipeline. The trade body cautions that, in the absence of a breathing space like this, the sector might experience slowdowns in its operations just when the worldwide competition for qualified personnel is becoming fiercer.

More than a policy tweak

The shift away from the H-1B lottery marks a bigger structural change in how the US approaches skilled migration. While the intent is to reward expertise and compensation, the outcome may be a narrower, less flexible workforce, one that favours scale over diversity of talent.

For tech companies, the message is clear: the era of predictable access to global skills is ending. Planning for the future will now demand sharper foresight, higher costs, and a willingness to navigate a far more complex immigration landscape.
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