Want more housing market stories from Lance Lamberts ResiClub in your inbox? Subscribe to the ResiClub newsletter.
For much of the past three years, Lennar, Americas second-largest homebuilder, has pursued an aggressive strategy: prioritize sales pace and market share, even if it meant slicing deeper into margins through price cuts and heavy incentives in the currently housing affordability strained market. That approach helped the company keep homes moving in softer Sun Belt markets like Florida, Texas, and Arizona. But now, after reporting its weakest gross margin since 2009, Lennar is signaling its ready to shift gears.
On Fridays earnings call, co-CEO Stuart Miller told analysts that Lennar will pull back just a little bit on its sales-over-margin strategy after seeing profitability erode further in the third quarter.
For Lennar, this is an opportune time to pause and let the market catch up a little bit, Miller said. Even though mortgage rates began to trend downward towards the end of the quarter, stronger sales have not yet followed. We have certainly begun to see early signs of greater customer interest . . . [but] this is just the right time for us to pull back just a little bit.
The numbers show why. Lennars average selling price, net of incentives, fell to $383,000 in Q3 2025down 9.2% from the same quarter last year, and 22% below the 2022 peak of $491,000. Some of that 22% decline reflects outright price cuts or the construction of smaller homes, but much of it stems from a surge in incentive spending, particularly mortgage rate buydowns.
In fact, Lennars incentives averaged 14.3% of the final sales price last quarter, the highest level since 2009, according to John Burns Research & Consulting. On a $450,000 home, that works out to more than $64,000 in concessions. Sales volume was difficult to maintain and required additional incentives in order to achieve our expected pace and to avoid building excess inventory, Miller acknowledged.
The incentive-fueled push succeeded in keeping sales moving, but it came at a steep cost. Lennars gross margin slipped to 17.5% in the third quarter, also the lowest since 2009. That appears to be the line the builder doesnt want to cross. Accordingly, we’re going to begin to ease back our delivery expectations for the fourth quarter and full-year in order to relieve the pressure on sales and deliveries and help establish a floor on margin, Miller said.
Florida has been one of the toughest markets. Elevated levels of unsold new and existing homesparticularly in Southwest Floridaforced Lennar into deeper discounting. On a year-over-year basis, its Eastern division, which is primarily Florida, posted the sharpest drop in average sales prices at 8.5%. Still, Miller struck a cautiously optimistic tone: Inventories have been moderating, and that has started to build a more stable environment.
Looking ahead, Lennar says mortgage rates hold the key to stabilizing weaker Sun Belt markets. If the 30-year fixed can settle below 6%, the builder believes affordability will improve enough to spark stronger demand. We are optimistic that if mortgage rates approach the 6.0% level or even lower, we will soon see some firming in the market, Miller said.
For now, Lennar is tempering its aggressive market-share push and refocusing on profitability. The way that I would think about what we’re doing is we’re running a marathon and partway through, we’re just taking a moment to take a breath, Miller said.
That pause may not last long. With its leaner cost structure and expanded investor marketplace platform, Lennar is positioning itself to pounce once demand firms, Miller told analysts on Friday. But in the meantime, the weakness across the Sun Belt has been made clear: Home prices net of incentives, once soaring, are now down more than 20% from their peak for one of Americas biggest homebuilders.
Get your popcorn (and maybe a plate of salmon sashimi) ready: Fat Bear Week, the annual competition to crown the rotundest brown bear at Alaskas Katmai National Park, is back for its 2025 season.
Since 2014, Katmai National Park has hosted a March madnessstyle competition inviting the public to vote on their favorite bear from 12 of the parks most robust residents. This year, the Fat Bear Week tournament and voting will take place September 2330, and the champion will be crowned on September 30. The competitions junior division just concluded, and its winner, 128 Jr, will join 11 other contenders in the main bracket.
Heres what to know about the competition, how to watch the bears, and where to cast your ballot:
What the heck is Fat Bear Week, anyway?
If youve never participated in Fat Bear Week, you might be left wondering why a sizable chunk of the internet is getting amped up about livestreams of bears.
The answer is that, right now, Katmai National Parks brown bears are in a state of hyperphagia, a period of time when their bodies satiation cues are dimmed in order to encourage them to bulk up as much as possible before winter. Ever since the park turned this biological process into a livestreamed competition more than a decade ago, its fostered a cult fanbase on Reddit, Twitter, and now TikTok. Last year, more than a million votes were cast in the bracket.
This is my superbowl, one commenter wrote on the parks Tiktok announcement of this years season. BEST WEEK OF THE YEAR, another added.
In an interview with NPR, Matt Johnson, the preserves interpretation program manager, said theres a lot for fans to look forward to this year.
“This year’s salmon run was extraordinary, with salmon numbers surpassing anything seen in recent memory,” Johnson said. “As a result, the brown bears of Katmai are well-nourished and looking for other things to do besides scrapping with each other for food.”
Where to watch
In order to get acquainted with this years contenders, its important to see them in their natural habitat. Katmai National Parks website includes a page dedicated to various livestreams located across the park, including an underwater salmon cam, a mountain view, and a scenic waterfall perspective.
How (and when) to vote
During the days of the competition, voting is open from 12 to 9 p.m. ET on the parks website.
Youll be shown source images of two bears, demonstrating how each contender transformed from their trimmer summer physiques to their current fall figures. Then, simply select whichever bear you think came out on top.
The contenders
The full Fat Bear Week bracket will be revealed later today. Currently, it seems likely that past champions including 128 Grazer (mother to the junior champion 128 Jr) and last years victor 747 will make a reappearance. Fans are also holding out for the return of beloved superstar 480 Otis, who was missing from the competition last year and has yet to be spotted in 2025.
here I am, just a girl, crying for Otis once again, one commenter lamented on the parks recent TikTok sharing that Otiss whereabouts are still unknown. i have rooted for Otis every year, and even if he doesnt show up again I will still root for him. Wherever he is, a fellow fan added.
U.S. government agencies will be able to use Meta Platforms’ artificial intelligence system Llama, a senior administration official said, as the Trump administration pushes to integrate commercial AI tools into government operations.
The General Services Administration, the government’s purchasing arm, will add Llama to its list of approved AI tools for federal agencies, said Josh Gruenbaum, the GSA’s procurement lead, in an interview ahead of announcing the initiative.
Agencies will then be able to experiment with Llama, a free tool, with GSA’s assurance that it meets the government’s security and legal standards.
Llama is a large language model capable of processing data, including text, video, images and audio.
GSA has also signed off in recent months on AI tools from Meta’s competitors, including Amazon Web Services, Microsoft, Google, Anthropic and Open AI. The companies agreed to sell their paid products at steep discounts and meet the government’s security requirements, GSA has said.
“It’s not about currying favor,” Gruenbaum said when asked whether tech executives are giving the government discounts to get President Donald Trump’s approval. “It’s about that recognition of how do we all lock in arms and make this country the best country it could possibly be.”
Federal agencies will be able to deploy the tool to speed up contract review or more quickly solve information technology hiccups, among other tasks, he said.
Courtney Rozen, Reuters
Japanese automaker Nissan is developing vehicles with self-driving technology as it works to turn around its struggling auto business.In a recent demonstration of the technology developed by British company Wayve, a Nissan Ariya sedan outfitted with 11 cameras, five radars and a next-generation sensor called LiDAR maneuvered its way through downtown Tokyo, braking for red lights as well as pedestrians and other cars at intersections.It’s set to be available in 2027, although Nissan did not give the models or other details.It’s an already-crowded field. The self-driving car market is estimated to reach $2 trillion by 2030, according to market researcher IndustryARC, riding on the back of advances in AI, sensor technologies and data processing capabilities.Japan’s top automaker, Toyota Motor Corp., has a partnership deal with Waymo, another self-driving technology developed by Google. Waymo has also arrived in Japan, in partnership with a cab company, but it’s still in the testing stage.Other automakers are also working on autonomous driving technology, including Honda Motor Co., General Motors and Mercedes-Benz, as well as companies outside the auto industry like Amazon and its subsidiary Zoox.Nissan’s push comes at a time when the overall Japanese auto market is facing serious challenges because of President Donald Trump’s tariffs. Nissan especially is struggling. It has slashed jobs and appointed a new chief executive, Ivan Espinosa, to attempt a turnaround. The maker of the March subcompact, Leaf electric cars and Infiniti luxury brand posted losses for the April-June period, following a fiscal year of red ink.
Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama
Yuri Kageyama, AP Business Writer
Alphabet’s Google will seek to avoid a forced sale of part of its online advertising business in its latest face-off with U.S. antitrust enforcers at a trial starting on Monday in Alexandria, Virginia.
The trial is the government’s next best shot at curbing what a judge has ruled is Google’s monopoly power, after losing a separate bid to make Google sell its Chrome browser earlier this month. Online publishers and rival ad tech developers, some of whom have separately sued Google for damages, will be watching the case closely.
The U.S. Department of Justice and a coalition of states are seeking to make Google sell its ad exchange, AdX, where online publishers pay Google a 20% fee to sell ads in auctions that happen instantly when users load websites. The government also seeks to require Google to make the mechanism that decides the winner of those auctions open source.
U.S. District Judge Leonie Brinkema, who will preside over the trial, ruled in April that Google holds unlawful monopolies in web advertising technology. After this week’s trial, she will decide what remedies to impose on the company.
The company has asked Brinkema to take the same cautious approach as a judge in Washington, D.C., who recently rejected most of the DOJ’s proposals in a separate case over Google’s monopoly in online search.
The cases against Google are part of a larger bipartisan crackdown by the U.S. on big tech firms, which began during President Donald Trump’s first term and includes cases still pending against Meta Platforms, Amazon and Apple.
Google says the DOJ’s proposal is technically unworkable and would lead to prolonged uncertainty for advertisers and publishers.
Google had previously offered to sell AdX, however, during private negotiations to end an EU antitrust investigation, Reuters reported last year. Google’s internal studies on that potential sale may come into evidence at this week’s trial.
Instead of selling AdX, Google has now proposed changing its policies to make it easier for publishers to use and support competing platforms. The DOJ has said such requirements alone are not adequate to restore competition.
A former News Corp executive and executives at DailyMail.com and Advance Local, which operates local news outlets in eight states, are among those expected to testify at the trial.
Some of those witnesses testified last year when the DOJ convinced Brinkema that Google locked publishers into using its publisher ad server – a platform used by websites to store and manage their digital ad inventory – by unlawfully tying the platform to Google AdX.
Doing so allowed Google to engage in practices that were not in publishers’ interests, such as giving Google’s advertisers the first and last opportunity to bid on ads, Brinkema wrote in her April ruling.
If the DOJ’s proposals have not bolstered competition within four years, Google should also be required to sell its publisher ad server, the government said in court papers.
Jody Godoy, Reuters
Rimowathe iconic luggage brand famous for its grooved aluminum suitcasesis stepping into a new category: leather handbags.
Today, the brand launches the Groove Collection, four leather bags that come in a range of silhouettes, including a shopper, a hobo, and two cross-body purses, priced between $1,200 and $2,150. Like everything Rimowa creates, these bags have an architectural aesthetic with handles and grooves reminiscent of the suitcases, and the pieces are all gender-neutral.
It’s a big move for Rimowa, allowing it to compete for the first time with other luxury accessories brands like Louis Vuitton and Chanel.
[Photo: Rimowa]
Rimowa was founded in 1898 in Cologne, Germany, where it is still does the majority of its manufacturing. For most of the brand’s history, it has focused on crafting highly functional, durable, and well engineered suitcases that have a cult status among frequent travelers. But over the last decade, the brand has gone through a transformation.
[Photo: Rimowa]
In 2016, the brand was acquired by the French luxury conglomerate LVMH, which owns brands like Louis Vuitton, Tiffany, and Dior. Under Alexandre Arnault (son of LVMH founder Bernard Arnault) who served as CEO from 2016 to 2021, Rimowa began positioning itself as a luxury brand with strong fashion chops. Rimowa collaborated with everyone from Virgil Abloh to Supreme and Dior to Rick Owens.
[Photo: Rimowa]
It also began expanding beyond its expertise in rolling luggage and has expanded into other products, like travel bags and accessories. Last year, for instance, it launched an aluminum handbag called the Original Bag that looked like a micro version of the suitcase. “We’re still very much focused on the concept of travel,” says Hugues Bonnet-Masimbert, Rimowa’s CEO. “We’re thinking about the idea of mobility, and all the ways we can use our expertise to make products that can help people on their commutes, whether that’s across countries or through their day.”
[Photo: Rimowa]
As part of this exploration, the company has also considered new materials. In 2023, for instance, the company created a $3,450 suitcase that is wrapped in leather. Given the brand’s focus on craftsmanship, Bonnet-Masimbert says that it was no small thing for the company to go beyond its expertise in aluminum and polycarbonate. “The craftspeople in our factories spend years developing their craft, so it takes time for them to understand how to work with a new material, like leather.”
While Rimowa makes the majority of its suitcases in factories in Germany, the Czech Republic, and Canada, it has begun working with factories in Italy with expertise in leatherwork in order to make these leather bags. “Even as CEO, I couldn’t tell the craftspeople when we would launch this collection,” says Bonnet-Masimbert. “They didn’t want to launch it until they felt they could create the most durable bags out of leather.” (All of these leather bags come with Rimowa’s lifetime guarantee.)
[Photo: Rimowa]
For the first time, Rimowa can now compete in the world of luxury handbags, including other brands within the LVMH umbrella, like Louis Vuitton. But in some ways, these bags are quite different from others on the market. Many luxury brands design bags for women, but these bags are much more gender-neutral, or even masculine, than others onthe market. Bonnet-Masimbert says that when Rimowa launched the Original Bag, he was surprised to find that more men than women bought and carried it. “Men don’t have as many options when it comes to bags,” says Bonnet-Masimbert.
And ultimately, Bonnet-Masimbert doesn’t see Rimowa as a fashion label at heart. It is grounded in performance and engineering, rather than what’s on the runway. “We’re not interested in chasing trends,” he says. “We’ll release new products when we feel like they’re serving a purpose.”
Oracle on Monday named insiders Clay Magouyrk and Mike Sicilia as co-CEOs, replacing Safra Catz who was named vice chair of the board after 11 years at the helm.
Catz steered Oracle through an industry-wide shift, helping win multi-billion-dollar contracts as companies spend aggressively to secure computing capacity for AI tech.
Shares of the company were down over 1% in premarket trading.
Sicilia oversees cloud-based industry-specific applications and AI solutions across vertical healthcare, financial services, and retail, while Magouyrk manages Oracle’s underlying cloud infrastructure platform that powers these applications.
Magouyrk joined Oracle in 2014 from Amazon Web Services while Sicilia joined Oracle through the acquisition of Primavera Systems, the company said.
Oracle also reaffirmed its financial guidance provided earlier this month, where it said it expects booked revenue at its Oracle Cloud Infrastructure business to exceed half a trillion dollars, pushing the stock to record highs.
Arsheeya Bajwa, Reuters
Neither a Jordan Peele-produced horror nor a Margot Robbie and Colin Farrell romantic drama were enough to continue the September hot streak at the movies. After back-to-back weekends that had films majorly overperforming, first “The Conjuring: Last Rights” followed by the anime “Demon Slayer: Kimetsu no Yaiba – Infinity Castle,” the North American box office slowed significantly.Overall ticket sales were down nearly 50% from last weekend, with the holdover champion “Demon Slayer” edging out the newcomer “Him” for first place, according to studio estimates Sunday. Crunchyroll and Sony Pictures’ “Demon Slayer” added $17.3 million over the weekend, bringing its total to $104.7 million, which makes it the highest grossing anime film ever in North America.The football horror “Him” opened in second place with an estimated $13.5 million in ticket sales. Universal Pictures opened “Him” in 3,168 North American theaters, where the audience was 52% male and 65% over the age of 25. Internationally, it earned $400,000.Produced by Peele’s Monkeypaw and directed by Justin Tipping, “Him” is about a promising young quarterback (Tyriq Withers) who is invited to train with a veteran (Marlon Wayans) at an isolated compound.“Him” scored with neither critics (it carries a 29% on Rotten Tomatoes) nor audiences, who gave the film a C- CinemaScore. In his review for The Associated Press, film writer Jake Coyle wrote that the film “was made with the potent premise of bringing the kind of dark, satirical perspective that characterizes a Monkeypaw production to our violent national pastime. But that promise gets fumbled in an allegorical chamber play that grows increasingly tedious.”“Him” was also nearly upstaged by another horror, “The Conjuring: Last Rights,” which made an estimated $13 million in its third weekend. With a global total of $400 million, it’s now the biggest film in the Conjuring universe.They are two of three horror movies in this weekend’s top 10, including “Weapons.” According to data firm Comscore, this year that genre alone has generated $1.1 billion in domestic box office receipts, just several million short of the 2017 record driven by “It” and “Get Out.”“Horror movies have been on a bit of a hot streak,” said Paul Dergarabedian, Comscore’s head of marketplace trends. “It’s going to be a record-breaking year.”In addition to “Demon Slayer,” Sony had a new film this weekend as well: The original romance “A Big Bold Beautiful Journey,” starring Robbie and Farrell, but that fizzled with audiences, earning only $3.5 million from 3,300 locations. It also received largely negative reviews and currently has a 37% on Rotten Tomatoes.“Audiences are selective in what they want to see,” Dergarabedian said. “Negative reviews can create really strong headwinds for original films with no brand recognition.”In its second weekend, “Downton Abbey: The Grand Finale” added another $6.3 million, bringing its running total to $31.6 million. The Stephen King adaptation “The Long Walk” is also estimating $6.3 million in weekend two, down only 46% from its opening. Its domestic total of $22.7 million has already exceeded its production budget of $20 million (though that sum does not account for marketing and promotion).Ron Howard’s 1995 hit “Apollo 13” played in 200 theaters this weekend for its 30th anniversary as well. It made an estimated $600,000. The 30th anniversary re-release of “Toy Story,” now in its second weekend, added $1.4 million.Next weekend there is excitement surrounding the new Paul Thomas Anderson film “One Battle After Another,” although his biggest hit to date remains the 2007 film “There Will Be Blood,” which made just over $76 million worldwide, not accounting for inflation.And right on its heels is a very different kind of cinema experience: AMC Theaters is hosting a release party for Taylor Swift’s 12th studio album, ” The Life of a Showgirl.” The 90-minute show, aptly titled “The Official Release Party of a Showgirl,” will play at all 540 AMC theaters in the U.S. from Oct. 3 through Oct. 5.
Top 10 movies by domestic box office
With final domestic figures being released Monday, this list factors in the estimated ticket sales for Friday through Sunday at U.S. and Canadian theaters, according to Comscore:
“Demon Slayer: Kimetsu no Yaiba Infinity Castle” $17.3 million
“Him,” $13.5 million.
“The Conjuring: Last Rites,” $13 million.
(tie) “The Long Walk,” $6.3 million.
(tie) “Downton Abbey: The Grand Finale,” $6.3 million.
“A Big Bold Beautiful Journey,” $3.5 million.
“The Senior,” $2.8 million.
“Toy Story” (30th Anniversary re-release), $1.4 million.
“Sight & Sound Presents: NOAH – Live!” $1.4 million.
“Weapons,” $1.3 million.
Lindsey Bahr, AP Film Writer
Convincing kids to brush their teeth twice a day is an age-old problem. A new company is arguing that the solution might look a lot like Lego.
Babsy is a toothbrush company founded by two pediatric dentists and a former Cartoon Network designer who believe that the answer to better oral health for kids comes down to simply making brushing fun. How did they realize this idea?
Founders Dante Paolino, Zach Gelber, and Marissa Gelber worked with the New York-based industrial design firm Leadoff Studio to design a cleverly customizable toothbrush inspired by classic toys. It’s currently available online as part of a starter pack, which includes all the components of the toothbrush, plus extra accessories, for $40.
[Photo: Takamasa Ota/courtesy Leadoff Studio]
While other companies have framed pediatric brushing as a tech problem (to be solved through electronic toothbrushes with special jingles or vibration speeds) Babsy argues that getting kids to brush their teeth is actually a design issueone with a very analog solution.
Design for behavioral change
Teeth brushing can be kind of a drag. What Babsy’s “Build-A-Brush” suggests is that the answer to pediatric tooth brushing isn’t to turn it into a high-tech gadget, but rather to decrease kids’ resistance by giving the brush more interaction and appeal.
It’s so hard to get kids to brush their teeth, says Jordan Diatlo, the founder, CEO, and creative director at Leadoff Studio, and a parent to two young kids. You would think, It’s just part of the daily routine, it should be easy, but nothey will resist with everything they’ve got. A lot of times, as a parent, I have to actually sit there and brush inside my kid’s mouth.
[Photo: courtesy Leadoff Studio]
Diatlo certainly isnt the only parent whos experienced this struggle. He recalls the Babsy founders sharing that parents always ask them the same question during dental visits: What toothbrush should I get my kid?
It’s an apt question, because there’s so much choice. The current market for kids’ toothbrushes ranges from electronic brushes inspired by the popular stuffed animal brand Squishmallow to U-shaped brushes designed to make the process more autonomous and biodegradable bamboo brushes. According to a 2024 report from the business consulting firm Grand View Research, the global pediatric oral care market size was estimated at $10.3 billion in 2024 and projected to reach $15.5 billion by 2030.
[Photo: Takamasa Ota/courtesy Leadoff Studio]
The toothbrush category is also expected to grow at the fastest rate between 2025 and 2030 compared to other products like mouthwash and toothpaste, due to “modifications and innovations in toothbrush design, such as the introduction of electric toothbrushes and improvements in the size and quality of bristles.” As companies including Oral-B, Philips Sonicare, and Foreo Issa continue to innovate new products specifically for kids, the market can become a bit confusing for parents.
[Photo: Takamasa Ota/courtesy Leadoff Studio]
The parents are always expecting that they need the latest and greatest vibrating technology, or bristlehead technology, or they need some app to trck their kids’ brushing habits, Diatlo says. But Drs. Paolino and Zach Gelber actually tell their parents that the toothbrushes’ capabilities don’t matter all that muchwhat really counts for overall oral hygiene is actually getting kids to brush their teeth more often.
To achieve that goal, the build-a-brush is all about turning a toothbrush from a utilitarian chore tool to a tactile, personalized toy.
Design for fun
Initially, the build-a-brush concept involved an interchangeable brush, body, and base for kids to choose and play with. Diatlos team took that concept and built on it, pulling inspiration from action figures, wooden block toys, and Lego.
[Video: courtesy Leadoff Studio]
The final product starts with a simple spiral rod, similar to the basic Lego piece that might hold up the structure. Then, the rest of the toothbrush is divided into five interchangeable parts: one toothbrush head, which is swiveled onto the top of the rod, and four decorative parts, which can be screwed onto the remaining rod in any order.
These parts, or “bits” as the company calls them, come in a range of colors and patterns, including pieces with smiling faces, others with 3D feet, some with chunky spiral shapes, and even one that resembles a koala clinging onto the side of the brush. The entire design is built to be interchangeable and easy enough to use that even a child as young as three would have the motor skills to put it together.
Design for children’s development
We’re really trying to hit these two really developing parts of the child’s brain, Diatlo says. First, the toothbrush plays to kids’ innate desire to build something with their own hands. And, second, it allows for kids to play into their developing sense of individuality by switching the brush based on what they’re into at any given moment, whether that be aliens or fairies.
[Photo: Takamasa Ota/courtesy Leadoff Studio]
A Babsy starter pack includes a spiral rod, six bits, and two brush heads. The brand also launched with four $10 expansion packs, each of which come with three additional bits. All of the toothbrushs components are made of 100% recycled polypropylene plastic, which Diatlo says has a soft feel with enough durability for a kids’ product.
This is the most rewarding product that we’ve ever launched, Diatlo says. Ive just been watching Babsys Instagram stories of kids opening up their toothbrushes, and there are some where a little kid opens it, and it looks like Christmas morning, they’re so excited. That just makes your heart melt, but also, the fact that we made a toothbrush that is getting kids this excited is an absolute victory.
Shares of U.S. technology companies slipped on Monday after President Donald Trump unveiled steep new visa fees as part of his immigration crackdown, raising concerns over higher labor costs and tighter access to skilled workers.
The Trump administration said on Friday it would ask companies to pay $100,000 per year for H-1B working visas, prompting some big tech companies and banks to warn employees to stay in the U.S. or quickly return.
Analysts said the impact should be moderate, given that the fees apply only to new applications, but warned that a constrained supply of skilled workers in the U.S. may push wages higher and squeeze margins.
Companies including Microsoft, Amazon, Alphabet and Goldman Sachs were among those that sent urgent emails to their employees with travel advisories.
Shares of Cognizant Technology Solutions, JP Morgan and Intel, which rank among the biggest sponsors of H-1B visas, were down between 1.2% and 1.6% in premarket trading.
“The H1B fee will constrain talent supply in the U.S., which in turn will drive up demand for locals or green card holders. IT firms will have to pay these employees more or risk losing them,” Jefferies analysts said in a note.
“The talent supply crunch will drive up onsite wages, which could drag profits by 4-13%.”
Indian IT workers make up the bulk of H-1B applicants, and while Indian IT companies have long benefited from U.S. work visa programs, they now face the prospect of higher costs and slower revenue growth.
Indian IT stocks slid on Monday, with the tech sub-index dropping nearly 3% and dragging the broader Nifty 50 index down.
“We believe this will essentially shut out new H-1B visas except in extreme cases for Indian IT companies, as USD100K increment is nearly double their median salaries and doesn’t make economic sense,” Ambit Capital analysts said.
Samuel Indyk and Akash Sriram, Reuters
