Is Trump's 'America First' Policy Driving Tech Jobs to Mexico?

By now, most people in North America are aware of President Trump’s plans to build a border wall dividing the US from Mexico. As a result, a large number of tech jobs in the US are looking to flee the country and head south of the border.
Expanding on that, in April Trump signed an executive order in Wisconsin to review the H-1B visa, used to hire skilled foreign workers. The new proposed order, dubbed “Buy American, Hire American” by the White House, looks for government approval favoring American products and hiring Americans. In turn, the order will make it increasingly difficult for foreign workers to obtain those visas.
This is where impacts on the technology sector come in. The H-1B visa has been widely popular within the industry which–mentioned above–has been used to employ workers from outside of the US, notably from Mexico, India, and some European countries.

Bearing that in mind, Infosys, an IT placement firm based in Indianapolis, announced on May 2 its plans to hire 10,000 American workers over the next two years. Infosys states it will open four new technology and innovation hubs across the country, with the first one opening in August 2017. The first hub alone is expected to create 2,000 jobs by 2021.
“Infosys is committed to hiring 10,000 American technology workers over the next two years to help invent and deliver the digital futures for our clients in the United States,” Dr. Vishal Sikka, CEO of Infosys said in the release.
As such, the Financial Times reported that Trump’s motion to limit the number of foreign workers into the US may very well benefit Mexico. The publication further states that technology outsources from the above-mentioned locations are looking to relocate to Mexico to “service US clients struggling to recruit software engineers.”
The Financial Times goes on to state that Tech Mahindra, a large IT service company in India, will likely double its operations in Mexico over the next 12 to 18 months, depending on how difficult H-1B visas will be to obtain.
“We’ve been having several conversations that we want to ramp up the operations in [Latin] America — especially English-speaking operations — because of the current administration,” Arvind Malhotra was quoted as saying.
The Financial Times further states that Tech Mahindra may double the size of its “110-strong” office in Mexico. In 2016 alone, the company filed 8,615 applications for H-1B visas. Placing staff in Mexico, according to the Times, will let the company, “send people quickly and cheaply across the border into the U.S. to provide services that are currently done by its large US-based staff.”
On that note, big names in the tech industry are calling out Trump’s restrictions on the visa. Eric Schmidt, executive chairman of Google’s parent company, Alphabet (NASDAQ:GOOGL), is one of them.
“The stupidest policy in the entire American political system was the limit on H-1B visas,” CNBC quoted Schmidt as saying. “We want the best people in the world, regardless of any form of sex, race, country, what-have-you. We want them to work for us and not our competitors.”
Don’t forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.