Washington has opened a new front in its fight over foreign workers — and some of the biggest names in the global technology industry are now in the crosshairs. US Vice President JD Vance announced Thursday that Microsoft was being suspended from the federal programme used by companies to seek permanent residency for foreign workers, accusing the technology giant of abusing the system and telling it to “hire American workers”.
The move did not stop with Microsoft. Labour Secretary Keith Sonderling said the department was suspending Cognizant, Infosys, Tata, Wipro, HCL and Capgemini from the Permanent Labor Certification programme. Adobe was also included, with Sonderling citing multiple active federal investigations.
Why Microsoft Is Being Targeted
Vance made Microsoft the centrepiece of the administration's case. “There has been no company in the United States, unfortunately, that has abused this system more than Microsoft,” he said. According to Vance, Microsoft laid off about 6,000 American workers in 2025 after certifying that it could not find qualified US employees, while subsequently receiving approval for more than 6,000 H-1B workers.
He also said the company filed 3,682 PERM applications, including nearly 1,000 for positions that overlapped with jobs held by the laid-off American workers. Those figures formed the basis of the administration's accusation of abuse. Microsoft did not immediately comment on the announcement.
Indian IT Giants In The US Crosshairs
The inclusion of India's biggest IT services companies gives the action a much wider significance for Indian technology workers in the United States. Cognizant had already been under scrutiny. The Labour Department suspended its PERM filings in September as part of an investigation into alleged fraud and misuse of employment-visa programmes.
Thursday's announcement expands that pressure to other major Indian outsourcing companies, including Infosys, Tata Consultancy Services, Wipro and HCL, along with France-based Capgemini.
But there is an important distinction between PERM and H-1B.
PERM is a labour-certification stage in the employment-based green-card process. A suspension of new PERM filings does not, by itself, cancel existing H-1B visas or amount to a blanket ban on a company's H-1B petitions.
Washington Widens Immigration Crackdown
The administration is also turning its attention beyond technology companies. The Labour Department has opened investigations into nine major American universities over their use of J-1 visas, including Harvard, Yale, Stanford, Brown and MIT. Officials said subpoenas have been issued as part of those investigations.
Attorney General Todd Blanche has separately said the Justice Department is investigating companies accused of favouring foreign workers over American employees. The message from the administration is therefore broader than a single company or visa category: Washington is increasingly scrutinising how American employers recruit, retain and sponsor foreign workers.
For Indian IT companies, the immediate impact is on the green-card pipeline. But the larger question is whether Thursday's action marks the beginning of a much wider examination of the industry's dependence on employment-based immigration.