Why The U.S. Staffing Market Is Slowing Down.

Over the past few months, the U.S. IT industry has cooled noticeably. Job openings are down, project starts are delayed, and recruitment firms are feeling the slowdown. The reasons are clear and largely policy-driven.

1. H-1B Visa Fee Hike

In September 2025, the U.S. raised the H-1B visa filing fee from around $2,000–$5,000 to nearly $100,000. Since over 70% of these visas go to Indian IT professionals, this change hit tech companies and staffing firms hard. Hiring skilled overseas talent has suddenly become far more expensive, leading firms to freeze or delay new hires.

2. Tariffs and Trade Tension

New tariffs announced by the Trump administration have raised costs for tech hardware and software imports. Many companies have paused digital transformation projects until the policy outlook stabilises. Recruiters are now seeing fewer open roles and slower approvals from clients.

3. Recent Data Reflects the Decline

• August 2025 saw the U.S. add only ~22,000 jobs, the weakest growth since 2020.

• IT hiring projections for late 2025 have been cut from 5% to around 2%, according to industry reports.

• Staffing firms report delayed projects and reduced contract roles.

4. Impact on the Recruitment Industry

• Fewer tech job openings and longer hiring cycles.

• Higher sourcing costs as firms focus more on local talent.

• Shift toward niche hiring: AI, cloud, and cybersecurity are still strong.

5. Outlook for 2026

If tariffs ease and confidence returns, IT hiring could stabilise by mid-2026. But until then, recruiters face a lean market that rewards specialisation, strong client relationships, and domestic talent pipelines.