The US government has suspended Microsoft, Adobe and several major technology and IT-services companies from participating in the Permanent Labor Certification Program, known as PERM, escalating the Trump administration’s scrutiny of companies that employ foreign skilled workers. Vice President JD Vance announced the action on October 8, accusing Microsoft of abusing the H-1B system and saying American companies should prioritize US workers.
The action also affects major Indian IT companies and global outsourcing firms, including Infosys, Tata, Wipro, HCL Technologies, Cognizant and Capgemini. US Labor Secretary Keith Sonderling said the Department of Labor would not accept new or process pending PERM applications involving the targeted companies, citing active federal investigations. The move could have significant implications for foreign technology workers, particularly Indian professionals seeking permanent residency in the United States.
What Is the US Suspending?
The immediate action involves the PERM program, formally known as the Permanent Labor Certification Program.
PERM is generally an important step for US employers seeking to sponsor foreign workers for employment-based green cards. Under the process, an employer must generally demonstrate that there is no qualified, willing and available US worker for the specific position before proceeding with the permanent-residency process.
The suspension therefore affects the permanent-residency pathway rather than automatically canceling an employee’s existing H-1B status.
| Company | Action announced | Main issue cited |
|---|---|---|
| Microsoft | PERM suspension | Alleged visa-system abuse/fraud |
| Adobe | PERM suspension | Federal investigation |
| Infosys | PERM suspension | Federal action |
| Tata | PERM suspension | Federal action |
| Wipro | PERM suspension | Federal action |
| HCL Technologies | PERM suspension | Federal action |
| Cognizant | PERM suspension | Federal action |
| Capgemini | PERM suspension | Federal action |
The Labor Department said the suspensions involving Microsoft and Adobe were connected to multiple active federal investigations, while several major IT outsourcing companies were also suspended from the program.
Why Is Microsoft Being Targeted?
Vance singled out Microsoft during a White House briefing, alleging that the company had laid off thousands of American workers while continuing to use foreign-worker programs.
According to figures cited by Vance, Microsoft laid off about 6,000 American workers in 2025 while receiving approvals for more than 6,000 H-1B workers. He also referred to thousands of green-card-related applications and alleged that some PERM applications corresponded to positions similar to jobs previously held by laid-off US workers.
Vance characterized the situation as evidence that the H-1B system was being used in ways that conflicted with its intended purpose.
These are government allegations, however, rather than an established finding that Microsoft committed fraud. Microsoft had not immediately responded to Reuters’ request for comment at the time of its report.
What Did JD Vance Say About H-1B Workers?
Vance argued that the H-1B program was intended to help US companies recruit highly skilled workers for positions that cannot be filled by American workers.
His administration has increasingly focused on the relationship between layoffs of US employees and companies’ use of foreign-worker programs.
The latest action is part of a broader immigration-policy push that has included increased scrutiny of H-1B employment and other temporary-worker programs. The administration has argued that employers should not use foreign workers to replace American employees or reduce labor costs.
The administration’s position has generated a broader debate about how the H-1B system should balance access to specialized global talent with protections for US workers.
Indian IT Companies Are Among Those Affected
The action is particularly significant for India because Indian technology professionals account for a large share of the H-1B workforce.
Companies such as Infosys, Tata, Wipro, HCL Technologies and Cognizant have extensive operations in both India and the United States. Their business models have historically included moving skilled employees between countries to support US clients.
The Department of Labor’s decision therefore introduces additional uncertainty for Indian employees who are progressing from temporary work authorization toward permanent residency.
However, the exact effect on each worker will depend on the stage of their immigration case and the type of application involved. The announcement does not mean that every Indian worker employed by one of the affected companies automatically loses their H-1B status.
What Does This Mean for H-1B Workers?
The distinction between H-1B and PERM is important.
An H-1B visa allows eligible foreign professionals to work temporarily in the United States in specialty occupations. PERM, by contrast, is part of the process many employers use when seeking permanent residency for an employment-based immigrant worker.
Therefore, the latest suspension primarily creates problems for the green-card pathway rather than immediately terminating H-1B employment.
For workers with pending PERM applications at affected companies, the Labor Department’s statement that it will not process those applications could create delays or uncertainty. Reuters reported that the department said it would not accept new or process pending permanent labor-certification applications involving the suspended companies.
The consequences for individual workers could vary depending on their immigration history, existing approvals and whether their employer remains subject to the suspension.
Broader US Crackdown on Foreign-Worker Programs
The PERM suspensions are part of a wider push by the Trump administration to increase scrutiny of foreign-worker programs.
The administration has already taken steps involving H-1B policies, including increased costs and greater scrutiny of employers that have recently laid off US workers. Recent policy changes and proposals have made the US immigration environment more uncertain for companies that depend heavily on international technology talent.
The government has also expanded scrutiny beyond technology companies.
On October 8, Labor Department officials announced investigations into nine US universities over alleged misuse of the J-1 exchange-visitor program. Officials said subpoenas had been issued as part of the investigations.
Nine Universities Also Face Investigation
The Labor Department said nine universities were being investigated over allegations involving international students and the J-1 visa system.
The institutions named in reports include Harvard, Yale and Stanford, among others. Labor Department Inspector General Anthony D’Esposito said investigators were examining whether foreign influence, improper financial relationships or visa abuse could be affecting federally funded research.
The university investigations are separate from the PERM suspensions affecting technology companies, but both actions reflect the administration’s broader examination of programs involving foreign workers, students and researchers.
What Could It Mean for Indian IT Firms?
For Indian IT companies, the biggest issue could be uncertainty around the US-based workforce and long-term immigration planning.
A significant portion of the industry’s US business depends on having access to skilled workers. If companies face greater restrictions when sponsoring employees for permanent residency, they may need to reconsider staffing structures, recruitment strategies and employee mobility.
Companies could also face greater compliance requirements and scrutiny over layoffs, H-1B applications and green-card sponsorship.
At the same time, the companies have large US operations and significant American workforces, meaning the eventual effect will depend on how broadly and how long the restrictions remain in place.
Impact on Indian Technology Workers
Indian professionals are likely to watch the developments closely because the US is one of the largest destinations for Indian technology workers.
For an employee on an H-1B visa, the long-term objective can be to transition toward permanent residency. A suspension affecting the PERM stage can therefore disrupt an important part of that progression.
The immediate impact, however, should not be overstated. The government has suspended the companies from a particular green-card labor-certification program; it has not announced that all existing H-1B workers employed by those companies must leave the United States.
The Bigger Picture
The latest action marks a significant escalation in US scrutiny of companies that rely on foreign skilled workers. The administration is linking its immigration enforcement efforts more directly to corporate hiring and layoff decisions, particularly when companies reduce US headcount while continuing to use foreign-worker programs.
For Microsoft, Adobe and the major Indian IT-services companies named by the Labor Department, the immediate issue is the suspension of PERM processing. The longer-term significance will depend on the outcome of the federal investigations, the duration of the suspensions and whether the administration introduces additional restrictions on H-1B and employment-based immigration.
Looking Ahead
The next key developments will be the Labor Department’s investigations and any clarification on how long the PERM suspensions will remain in effect. Affected companies and workers are likely to seek more details on pending applications and how the restrictions apply to different stages of the employment-based green-card process.
For Indian technology professionals, the development adds another layer of uncertainty to the US immigration pathway. H-1B employment, PERM labor certification and green-card processing are separate stages, so the effect on individual workers will depend on where they are in that process and on any further guidance issued by US authorities.
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