Current US Tech Job Market for International Students

 

International students in US tech face unprecedented challenges as multiple factors converge: Fed rates spiked from 0.25% to 5.5%, tech companies laid off 260K workers, VC funding plummeted from $681B to $285B, and H-1B visa rejections hit 73%. Meanwhile, capital shifted to AI ($83B in 2023) while crypto crashed from $3T to under $1T. For the Indian international CS/IT students who invested $80–120K in degrees, consider: pursuing any internship, taking a strategic gap semester in India, freelancing, or leveraging your US degree in India’s growing tech sector. The US market should stabilize in 6–12 months, but timing is everything in this economic cycle

In the last 2–3 months, multiple friends have reached out to me regarding their children who are pursuing bachelor’s and master’s degrees in IT in the US. These students are finding it extremely difficult to secure internships and full-time roles. It’s a distressing situation, as these hardworking young people’s families have invested significant amounts of money ($80–120K USD) in their education. Many have taken out education loans that need to be repaid. Without well-paying jobs in the US, these loans will become a tremendous burden. This is particularly concerning given that approximately 229,000 international students were enrolled in graduate CS/IT programs in the US during 2022–2023, many facing similar challenges.

Generated using Grok AI

Here is my analysis of this situation. It might sound preachy coming from someone already established in the US with the comfortable life these students are aspiring to. However, I need to emphasize that their current difficulties have little to do with their work ethic and much more to do with macroeconomic conditions.

Let me explain the macroeconomic factors:

1. Economic Challenges in Western Economies

Following the Russia-Ukraine conflict, much of Europe experienced economic contraction. This was largely due to the high cost of energy after losing access to cheaper Russian supplies. Natural gas prices in Europe increased by over 400% in 2022 compared to pre-war levels. Europe now needs to find alternative energy sources. Germany, Europe’s largest economy, experienced two quarters of negative growth in late 2022/early 2023, technically entering a recession. Many European countries have ruled out traditional options such as coal or nuclear power (and even if they wanted to pivot, such transitions take time). The remaining alternatives are limited and expensive. Regarding US energy policy, the Biden administration paused approvals for new LNG export facilities in January 2024 to assess climate impacts, though existing approved facilities continued exporting.

2. The Era of Cheap Credit (2021–2023)

To prevent recession in Europe and America and to mitigate the negative impacts of COVID, Western economies injected massive liquidity into their markets. The Federal Reserve lowered interest rates to near-zero (0–0.25%) in March 2020 during the pandemic. This led to cheap credit for businesses and venture capital firms, resulting in unbridled exuberance. Global VC funding peaked at $681 billion in 2021, an unprecedented high. VCs engaged in funding sprees at high valuations, which led to talent shortages. Anyone entering the tech sector during this period often received inflated salaries, sometimes unjustifiably so. This also drove up talent costs significantly. (This was precisely when many international students entered master’s programs, making financial decisions based on these inflated salary expectations.)

3. Credit Tightening and Its Consequences

As countries emerged from the COVID recession, they faced rampant inflation that severely impacted those at the lower end of the economic spectrum. The Federal Reserve rapidly increased interest rates from 0.25% to 5.5% by July 2023. This forced companies that had been aggressively hiring and expanding to make significant adjustments. Tech companies laid off approximately 260,000 workers in 2022–2023. Some companies made drastic cuts and faced backlash, while many others continued operating at a loss, hoping conditions would improve. This cycle of monetary expansion followed by contraction severely affected average citizens, who suffered from both rising costs and expensive credit. Jobs became scarcer and less lucrative. Additionally, the US economy, heavily dependent on transportation and automation, requires substantial energy. Green energy policies contributed to maintaining higher energy costs.

4. US Government Policy Impacts

The Biden administration implemented policies that, while well-intentioned, were often poorly executed. For example, the push to include Ukraine in NATO may have been justifiable, but it seemingly failed to anticipate the Russian response. Even while supporting Ukraine, there appeared to be no clear end goal or path to victory. Additionally, sanctions against Russia weaponized the SWIFT financial system, sending shockwaves through global finance. Many countries realized they could no longer rely on US and European-dominated currency trading, leading to expanded BRICS membership. In January 2024, BRICS expanded beyond its original members (Brazil, Russia, India, China, and South Africa) to include Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE.

5. European Regulatory Pressures on Technology Companies

European governments have implemented significant regulatory measures affecting technology companies. Europe has introduced various regulations such as GDPR, DSA, data governance requirements, and accessibility mandates, creating substantial compliance burdens for tech companies. Working in the tech industry, I’ve witnessed the enormous resources required to maintain compliance, costing US tech companies billions. While large tech corporations can absorb these costs, they create significant barriers for startups attempting to scale.

6. Antitrust Enforcement and Business Impact

In the US, the Biden administration appointed Lina Khan as chair of the Federal Trade Commission, taking a more activist approach to antitrust enforcement. While numerous investigations were launched, few reached conclusive outcomes. However, Khan and her European counterparts effectively blocked many mergers and acquisitions. Major deals like Adobe’s acquisition of Figma were rejected after lengthy reviews in Europe, with many others facing heightened scrutiny. This blocked profitable exit strategies for investors. Since venture capital typically operates on seven-year investment cycles, VCs that invested in 2017–2020 found themselves unable to exit, while also having made additional high-valuation investments during 2021–2023. Consequently, the tech market experienced a severe capital shortage. Funding declined dramatically from the 2021 peak of $681 billion to $445 billion in 2022 and approximately $285 billion in 2023.

7. Cryptocurrency Sector Challenges

Another significant but less discussed area is cryptocurrency, which attracted substantial VC investment from 2018–2022. Crypto was positioned as a solution to currency hegemony that could simplify international trade. The global cryptocurrency market capitalization reached nearly $3 trillion in November 2021 before collapsing to under $1 trillion by mid-2022. Bitcoin fell from a high of nearly $69,000 in November 2021 to around $16,000 by November 2022. Governments worldwide were concerned about losing monetary control and implemented various regulatory measures. The US government’s approach was particularly severe, targeting not only companies but also individuals with financial restrictions. While ostensibly protecting consumers, these actions resulted in massive capital destruction in the VC ecosystem.

8. The AI Revolution and Capital Reallocation

In 2023, ChatGPT showcased the power of large language models and AI. This represents perhaps the most significant technological revolution since the computer and internet. AI development requires enormous computational resources and is improving exponentially. It has attracted unprecedented numbers of talented minds, with relatively lower barriers to entry compared to previous technological revolutions. AI startup funding reached approximately $83 billion in 2023, even as overall tech investment declined. NVIDIA’s market capitalization grew from around $350 billion in early 2023 to over $2 trillion by early 2024, reflecting the massive shift toward AI infrastructure. This capital-intensive sector has absorbed most available venture funding. With AI companies delivering 30–40% returns, investors have little incentive to risk capital on early or mid-stage startups in other sectors.

9. The Trump Administration and Silicon Valley

President Trump has assumed office amid these complex challenges and appears aware of them. Historically, Silicon Valley has predominantly supported Democrats, with data showing employees at major tech companies contributed primarily to Democratic candidates in 2016 and 2020. They played crucial roles in Obama’s election and were major donors to Hillary Clinton in 2016 and Biden in 2020. However, regulatory actions against tech companies, cryptocurrencies and AI have alienated many in Silicon Valley. In 2024, several prominent tech leaders publicly shifted their support to Trump. The industry increasingly favors leadership that understands business dynamics. The Trump administration now includes several Silicon Valley luminaries, led by figures like Elon Musk and Marc Andreessen. While pockets of staunch Democratic support remain, Trump has gained significantly more acceptance among the tech industry’s center.

10. Trump’s Approach to Trade and Technology

Trump approaches governance with a business mindset, prioritizing flexibility and profit maximization over rigid ideology. He recognizes that current WTO and global trade frameworks benefit from America’s historically low tariffs and minimal barriers, while many other countries maintain higher protections. His reciprocal approach aims to create a more level playing field for American workers. Simultaneously, he appears committed to maintaining US technological dominance. Early investment patterns in his administration suggest a focus on technology, energy, and manufacturing sectors.

My prediction is that it will take 6–12 months for conditions to stabilize. This period will involve addressing systemic problems, reducing energy prices, reviving mergers and acquisitions, potentially liberalizing cryptocurrency regulations, and developing more mature applications of AI technology. This strategy represents a significant gamble with unpredictable outcomes. Even the best-designed economic plans can be derailed by unforeseen events such as wars, climate disasters, or another pandemic.

Impact on International Students

This brings us to the critical question of what current international students should do. The timing of graduation significantly affects career trajectories. Graduating during economic booms typically results in higher starting salaries and better long-term earnings, while graduating during downturns can permanently depress earning potential.

Currently, the tech hiring market is extremely challenging, with even H-1B visa holders being “benched” while awaiting new opportunities. This creates an even more difficult situation for F-1 visa students who need to secure employment before transitioning to H-1B status. The H-1B visa system, the primary pathway for international students to work in America, rejected approximately 73% of applicants in the 2023 lottery, further complicating matters.

For students still in college, here are my suggestion

1. The best scenario for current students is to secure any internship possible. Even if not ideal, an internship will help develop skills and allow utilization of Optional Practical Training (OPT) periods, potentially leading to H-1B sponsorship.
2. For those unable to find internships, an interesting alternative suggested by a colleague is taking a gap semester. During this period, returning to India and finding employment allows students to apply their skills while maintaining F-1 visa validity. They can then return to complete their studies and qualify for OPT afterward.

For graduates unable to find employment, I suggest two options:

1. Pursue freelance consulting work, which provides income while building skills and a professional portfolio.
2. Return to India, where the tech sector continues to hire. A US master’s degree qualifies graduates for better positions in India’s tech industry or at global capability centers, which offer competitive compensation. Later, if opportunities arise to return to the US or relocate elsewhere, the US degree will provide an advantage. This decision depends largely on financial resources, as maintaining US residency without employment is extremely costly.

While returning to India might feel like abandoning a dream, India’s economy is considerably more dynamic than many Western economies. I believe the US economy will outpace most others over the next four years, but timing is crucial in taking advantage of this growth.