The US administration has suspended participation of Microsoft, Adobe and six other major IT companies in the PERM labor certification program, which allows employers to sponsor green cards for foreign workers. Authorities suspect companies of abuses when hiring foreign specialists and intend to ensure that American employers actively hire US citizens. Vice President JD Vance singled out Microsoft, accusing it of firing American workers to hire foreigners.
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Labor Secretary Keith Sonderling announced that the restrictions would also affect Cognizant Technology Solutions, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini. Many of these companies have Indian origin or large operations in India and provide IT services to other organizations on a contract basis. Sonderling said authorities are committed to cracking down on the abuses that the administration says these companies have enabled for decades.
“We are cutting off the head of the snake—the companies that have enabled these abuses for decades.”said the Minister of Labor.
Vance also sharply criticized Microsoft, one of the world’s largest technology companies. “Our message to Microsoft is this: You are a great American company, but you must hire great American workers. You can’t fire American workers and then replace them with foreign workers.” – said the vice president at a press conference dedicated to the announcement of the suspension of companies’ participation in the program.
Microsoft laid off about 6,000 U.S. employees last year while receiving 6,300 H-1B visas and nearly 3,000 green cards, Vance said. He claims the company used the immigration system to replace local workers with foreigners. “Unfortunately, there was no company in the United States that abused this system more than Microsoft.”“Vance added.
At the same time, we are not talking about a complete ban on attracting foreign specialists. The PERM (Permanent Labor Certification Program) program provides a procedure in which the employer must confirm that a suitable American specialist could not be found for the relevant vacancy. After passing labor certification, the company can sponsor a green card for a foreign employee. Obtaining US permanent resident status, in turn, can become one of the stages on the path to citizenship.
Suspension of participation in PERM does not automatically cancel existing H-1B visas or prohibit the hiring of all foreign workers. However, it makes it difficult for affected companies to obtain permanent residence for employees who need to undergo this procedure. As the Associated Press notes, supporters of the restrictions believe that such measures should protect American workers from foreign competition, while critics fear that they will make it more difficult to attract qualified workers to the United States.
Microsoft disputed the notion that its visa applications are primarily related to hiring new foreign workers. Of the roughly 6,000 H-1B applications filed last fiscal year, about 80% were to extend visas or change the status of existing employees, the company said. The remaining applications concerned specialists who were already legally in the United States and decided to move to Microsoft. According to the company, their number corresponds to approximately 1% of its US workforce.
“We believe in the strength and talent of America’s workers. This is why the vast majority of Microsoft employees in the US are Americans.”the company said in a statement. Microsoft also emphasized that it only submits H-1B applications for workers who meet the requirements for this visa category, and pays employees with such visas the same salaries as colleagues performing comparable work.
By the end of the third quarter of fiscal year 2026, Microsoft had filed approximately 1,680 permanent residency petitions, according to the U.S. Department of Labor. In the first nine months of the fiscal year, the company also ranked fifth among U.S. employers in the number of H-1B filings, with 3,688 such filings. Microsoft has used nearly 54,000 H-1B visas over the past decade, trailing Amazon, Infosys and Tata.
Critics of the administration’s decision highlight the contradiction between the stated goal of protecting foreign workers from dependence on an employer and limiting opportunities to obtain a green card. Doug Rand, a former USCIS adviser, noted that a permanent resident can change jobs and negotiate salary without fear of losing residency due to being fired. In his opinion, blocking the issuance of green cards could increase the dependence of workers with H-1B visas on employers.
The decision was the latest step by the Donald Trump administration to tighten labor immigration rules. Over the years, Indian IT outsourcers have been among the largest users of the H-1B program. They have been criticized for bringing in Indian talent to perform tasks at American companies, sometimes offering lower wages than local workers. At the same time, the US technology sector has traditionally depended on the international influx of engineers, researchers and developers.
The administration is also seeking changes to the conditions for issuing H-1B visas. Among the proposed measures are an increase in the cost of visas for certain categories of applicants and changes in selection rules taking into account the level of salary offered. The government previously announced plans to impose a $100,000 fee on some applications, but the measure has faced legal hurdles. In August, the administration proposed a new levy that would be $103,265; The final rules have yet to be approved.
In parallel, American authorities began inspecting nine universities, including Harvard and Stanford universities, as well as the Massachusetts Institute of Technology. The investigation concerns possible abuse of J-1 visas intended for exchange program participants, including foreign scientists and graduate students. Vance argues that some schools may have used such programs to recruit foreigners under conditions that disadvantage American workers.
Image source: Microsoft
The announcement of the restrictions came just hours before President Donald Trump presented Microsoft CEO Satya Nadella with the National Medal of Technology and Innovation. Vance emphasized that the administration does not intend to harm the company: according to him, the authorities want Microsoft to continue to develop while simultaneously giving priority to American workers.
The tech industry worries that further restrictions on labor immigration could make it harder to attract foreign talent and weaken U.S. competitiveness in the long term. Reform advocates, on the other hand, believe that stricter enforcement of PERM and H-1B rules will help protect local workers and prevent abusive hiring practices.
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