Medical institutes as well as some of the country's largest companies are warning of a top level "brain drain" as a result - and have met with immigration officials to plead their case.
For five years, American H-I-V researcher Sarah Palmer has worked in Australia.The 57-year-old is one of the most renowned researchers in the world in her field.
She's working on a cure, which she says would be a major medical breakthrough and a game changer for the 37 million people infected with HIV around the world.
She relocated to Australia on a 457 visa after working at some of the world's most prestigious medical research centres.
She applied as a life scientist - but it's a category that no longer qualifies for the temporary work visa following recent changes by the federal government.
President of the Association of Australian Medical Research Institutes, Tony Cunningham, helped recruit Sarah and says she was the best applicant by far.
Hundreds of occupations have been taken off the eligibility list for 457 visa applications.
Hundreds more have been wound back with an offer of two years in Australia instead of four, and no pathway to permanent residency.
Sarah Palmer says that given she had to uproot her partner's life to make the move to Australia, the shorter timeframe would have been enough to change her mind.
The medical sector is already warning that there are several star scientists who have turned down positions in Australia as a result.
Other industries are raising the alarm too.
Katie Lahey , the Executive Chairman of international executive recruiting company Korn Ferry, fears the two-year restriction will impact the ability of Australian companies to find the world's best talent for chief executive roles.
More than a third of C-E-Os currently employed at A-S-X-100 listed companies were born overseas.
Gregory Robinson is the managing partner at executive search and board advisory firm, Blenheim Partners.
He says the government's visa changes are already forcing some companies to put their applicant searches on hold.
A number of top Australian companies have met with Immigration officials in recent weeks to plead their case for exemptions for particular occupations.
The Immigration Minister Peter Dutton says there'll be regular reviews of the government's occupation lists, with the first one scheduled for July.
