What the suspension covers

On Thursday, 8 October, the US government suspended Microsoft, Adobe and several large IT outsourcing firms from the Permanent Labor Certification (PERM) program, which lets employers sponsor a foreign worker for a green card. Reuters names Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini among the companies affected. PERM requires the Labor Department to certify that there are not enough qualified US workers for a job and that hiring a foreign worker will not hurt the wages or working conditions of similarly employed Americans. For the named companies, the government said it will not accept new PERM applications or process pending ones. Many IT firms employ hundreds of thousands of workers who typically start on temporary H-1B visas and later seek permanent residency through PERM.

Vance's fraud allegations

Vice President JD Vance told a White House news conference that the program has 'become rife with fraud'. He claimed Microsoft laid off 6,000 American workers in 2025 while taking on 6,300 H-1B temporary worker visas and nearly 3,000 green cards. Vance also accused some companies of posting job ads designed to be ineffective, so they could cite a lack of applicants to justify hiring lower-paid foreign workers. Labor Department data cited by The Independent and TechRadar show Microsoft as the largest PERM filer, with more than twice the filings of Apple, the next largest tech company.

Vance also made a sharper charge against the company itself.

There has been no company in the United States, unfortunately, that has abused the system more than Microsoft.

Vance added a warning about how the hiring is done.

You cannot lay off American workers and then replace them with foreign indentured servants.

Company and government responses

Microsoft said that of the approximately 6,000 H-1B applications it submitted in the last fiscal year, 80% were to extend or change the status of existing Microsoft employees. The company also said the 'vast majority' of its employees in the US are American. Tata Consultancy Services said its strategy is centred on hiring locally in the US and that its PERM applications were in 'single digits in the last two years'. India's foreign ministry said on Friday that the language Vance used is deeply offensive, noting that Indian professionals in the United States are highly educated and skilled contributors to its economy. The ministry added that the decision 'does not advance shared ambitions'.

Labor Secretary Keith Sonderling said the government would act against the named firms.

We will not accept any new or process any pending permanent labor certification applications involving these companies.

Sonderling said the companies had collectively filed applications for almost three million workers, with over 230,000 H-1B visas approved and more than 100,000 permanent labor certifications received. Labor department inspector-general Anthony D'Esposito said investigations are under way.

Subpoenas have been served, investigations are under way and nobody will be getting a free pass because their name is carved into an expensive building.

Officials have also opened probes into nine universities, among them Harvard, Yale and Stanford.

Awards and the earlier fee fight

Hours after the suspension, Trump honored billionaire tech leaders with science awards, including SpaceX CEO Elon Musk and Microsoft CEO Satya Nadella. AP reports that five of the six honorees are immigrants. TechRadar notes that Nadella and Musk both previously held H-1B visas. The move follows an earlier attempt by the White House to impose a $100,000 fee on new applications, which a federal judge ruled in June amounted to an unauthorized tax that infringed on Congress's authority to raise funds. The administration has appealed that ruling. Microsoft announced in July that it would cut 4,800 jobs, about 2.1% of its global workforce.