U.S. Financial Sector's Exposure to H-1B Visa Fee Hikes: Risk Assessment and Earnings Volatility for Goldman Sachs and Citigroup

The Trump administration's imposition of a $100,000 fee for new H-1B visa applications, effective September 21, 2025, has introduced significant regulatory and financial risks for U.S. financial institutions. For firms like Goldman Sachs and Citigroup, which rely heavily on the H-1B program to fill critical roles in technology and quantitative finance, the policy shift threatens to disrupt talent pipelines, inflate labor costs, and force costly strategic recalibrations. This analysis evaluates the earnings volatility and risk exposure of these firms, drawing on regulatory exposure, labor cost trends, and offshore strategy adjustments.

Regulatory Exposure and Legal Uncertainty

The $100,000 fee, introduced via executive proclamation, has sparked immediate legal challenges. Critics argue that the policy exceeds executive authority by rewriting provisions of the Immigration and Nationality Act (INA) and bypassing the Administrative Procedure Act's notice-and-comment requirements Explainer-Can Trump's $100,000 Fee for H-1B Visas Withstand Legal Challenges^[1]. Immigration attorneys have warned that the fee could be deemed arbitrary and capricious, particularly as it disproportionately impacts employers reliant on H-1B workers How Trump's $100,000 H-1B Visa Plan Changes Immigration^[2]. While the Supreme Court's past deference to presidential immigration authority (e.g., Trump v. Hawaii) may complicate litigation, the legal uncertainty itself creates operational risks for firms. Goldman Sachs and Citigroup, for instance, have advised H-1B visa holders to avoid international travel until the rules are clarified, signaling heightened compliance burdens Here's what immigration attorneys say about Trump's $100,000 H-1B visa fee^[3].

Labor Cost Shifts and Strategic Adjustments

Goldman Sachs and Citigroup are among the largest H-1B sponsors in the financial sector. In 2025, Goldman filed 1,280 certified H-1B applications, while Citigroup submitted 874, primarily for technology roles such as software engineering and application development See the Finance Jobs Most in Jeopardy From Trump's H-1B Visa …^[4]. The new fee adds a one-time $100,000 cost per new hire, on top of existing fees like the $780 I-129 filing fee and $4,000 public law fee for large employers H-1B Fee Hike 2025: New $100K Fees and USCIS Rules Explained^[5]. For Goldman, this could translate to an additional $30.4 million in annual costs (based on 304 approved petitions in 2025 Q3) H-1B Fee Hike 2025: New $100K Fees and USCIS Rules Explained^[5].

To mitigate these costs, firms are accelerating offshore delivery models. Citigroup, which historically relies on staffing agencies for H-1B workers, is shifting more project work to India, Mexico, and the Philippines, where labor costs are up to 65% lower than in the U.S. Labor Cost Comparison: North America vs. Offshore Staffing^[6]. While offshore staffing reduces direct hiring expenses, it introduces risks such as longer project timelines, communication barriers, and reduced innovation velocity in areas like blockchain and AI How H-1B Visa Changes Could Reshape Wall Street^[7]. Goldman Sachs, meanwhile, is prioritizing green card sponsorships for critical roles, a strategy that increases long-term costs but ensures continuity in talent access Financial firms to feel outsized impact from Trump's H-1B overhaul^[8].

Earnings Volatility and Competitive Risks

The financial impact of the H-1B fee hike is magnified by the sector's reliance on high-skilled foreign labor. For example, Goldman Sachs' average compensation for H-1B visa holders is $126,495, with roles in quantitative analysis and fintech being particularly vulnerable to talent shortages The 20 financial firms that could be hardest hit from Trump’s new H-1B fee^[9]. Analysts project that the fee could force firms to absorb higher domestic labor costs or reduce investment in innovation. Citigroup's Q2 2025 earnings, which showed a 6.6% year-over-year EPS increase to $1.62, may face downward pressure if offshore shifts delay revenue-generating projects Citigroup Q2 2025 Earnings Preview: Analyst Forecasts^[10].

Moreover, the policy risks a “brain drain” as skilled workers from India (71% of H-1B recipients) seek opportunities in countries like the U.K. and Canada, which are actively courting global talent Trump’s H-1B visa fee hike: Which countries could benefit?^[11]. This could erode the U.S. financial sector's competitive edge, particularly in technology-driven areas like algorithmic trading and risk modeling.

Conclusion: Strategic Implications for Investors

The H-1B fee hike represents a material risk for Goldman Sachs and Citigroup, with potential earnings volatility arising from increased labor costs, offshore strategy adjustments, and regulatory uncertainty. Investors should monitor how these firms balance short-term cost management with long-term innovation goals. Key indicators include the pace of offshore work migration, the success of green card sponsorship programs, and the outcome of legal challenges. While the policy may temporarily boost domestic hiring, the broader implications for competitiveness and innovation suggest a cautious outlook for the sector.