The Trump administration on Thursday suspended Microsoft, Adobe and six major information-technology outsourcing companies from a US employment programme used by employers to sponsor foreign workers for permanent residency, amid federal investigations into alleged abuse of the visa system.
The action, announced in Washington on October 8, 2026, prevents the affected companies from submitting new applications or having pending applications processed under the Department of Labor’s Permanent Labor Certification programme, commonly known as PERM.
US Vice President JD Vance singled out Microsoft during the announcement, accusing the technology giant of laying off American workers while continuing to make extensive use of H-1B visas and employment-based green cards.
Vance said Microsoft laid off about 6,000 American workers last year while obtaining 6,300 H-1B visas and nearly 3,000 green cards.
“If you do the math, for every worker that Microsoft laid off, they replaced that worker with one and a half foreign indentured servants,” Vance said, according to the Associated Press. He also told the company: “You cannot lay off American workers and then replace them with foreign indentured servants.”
The figures and allegations are statements from the Trump administration and should not be interpreted as an independent finding that Microsoft illegally replaced American employees with foreign workers.
The companies affected alongside Microsoft and Adobe are Cognizant, Infosys, Tata Consultancy Services (TCS), Wipro, HCL Technologies and Capgemini.
US Labor Secretary Keith Sonderling said the Department of Labor would not accept new PERM applications involving the companies or process applications that are already pending.
“Since 2009, just these companies alone have requested almost three million foreign workers,” Sonderling said, adding that the companies had received more than 230,000 H-1B visa approvals and more than 100,000 permanent labor certifications. The Labor Department’s action is focused on the PERM process, which is generally a key step for employers seeking to sponsor foreign workers for employment-based permanent residence in the United States. Under the system, employers are required to demonstrate that there are not sufficient qualified, willing and available US workers for the position and that employing the foreign worker will not adversely affect the wages and working conditions of similarly employed American workers.
The suspension does not itself cancel existing H-1B visas. Rather, it disrupts a route through which eligible foreign workers employed by the affected companies can progress towards permanent residency.
That distinction is significant because H-1B status is temporary, while a green card provides permanent resident status and allows a worker substantially greater freedom to change employment.
Microsoft has disputed the administration’s characterisation of its H-1B hiring practices. The company said that approximately 80% of its H-1B applications in the previous fiscal year were for extensions or changes of status involving existing Microsoft employees rather than new hires.
Microsoft also said the remaining applications were for people already legally in the United States who moved to the company and represented about 1% of its US workforce. The company said it complies with the requirements of the H-1B programme and pays its H-1B employees competitively.
The dispute comes amid a broader Trump administration campaign to tighten restrictions on skilled-worker immigration.
In September, President Donald Trump extended restrictions on the entry of certain H-1B workers and maintained a $100,000 payment requirement for covered new H-1B petitions involving workers seeking entry from outside the United States. The White House said the policy was intended to address what it described as abuses of the H-1B programme and protect American workers.
A separate executive order issued in September directed federal agencies to increase scrutiny of H-1B applications where employers had recently laid off American workers or planned layoffs affecting similarly situated US employees.
Thursday’s action therefore represents a further escalation of the administration’s approach to employment-based immigration, particularly in the technology and outsourcing sectors.
The announcement also created an unusual contrast involving Microsoft. President Trump was scheduled on Thursday to present Microsoft’s chief executive, Satya Nadella, with the National Medal of Technology and Innovation for contributions to technology and innovation. The award ceremony was taking place on the same day that Vance publicly criticised Microsoft’s use of foreign-worker programmes.
The administration’s action also extends beyond Microsoft. Federal officials said the eight companies together had been the subject of scrutiny involving their use of foreign-worker programmes, with the Labor Department describing the investigations as part of a wider effort to address suspected fraud and abuse.
The broader immigration crackdown is also affecting universities. Vance announced that nine universities, including Harvard, Yale, Stanford and the Massachusetts Institute of Technology, would face investigations over alleged misuse of J-1 exchange visas. The administration has accused some institutions of using foreign-worker or student programmes in ways that could undermine American wages and employment, allegations the universities have not been established as guilty of through the announcement alone.
For technology companies, the immediate effect of the PERM suspensions could be significant because skilled foreign employees who rely on employer sponsorship for permanent residency may face delays in progressing from temporary work status to permanent residence.
For the Trump administration, however, the measure reflects its stated objective of making employers demonstrate a stronger preference for American workers and increasing scrutiny of programmes it believes have been used to displace or undercut domestic labour.
The dispute is likely to intensify debate in the US technology industry over the role of H-1B workers, particularly as major technology companies continue to compete for specialised talent in areas such as artificial intelligence, software engineering and advanced computing.