The U.S. government has suspended eight technology companies, including Microsoft and Adobe, from a program that facilitates the process for foreign workers to obtain permanent residency in the United States. Labor Secretary Keith Sonderling announced on Thursday that the Permanent Labor Certification Program, commonly known as PERM, will no longer accept new or process pending applications from these firms. This move stems from allegations of fraud and abuse within the H-1B visa system, intended for skilled foreign workers.
Vice President JD Vance stated that the affected companies have allegedly used federal programs to replace American workers with foreign labor, effectively creating "foreign indentured servants." Vance specifically called out Microsoft, claiming the company has utilized the system more than any other in the United States. He asserted that the administration's message to Microsoft is clear: "You're a great American company, but you've got to hire great American workers." The Labor Department has initiated investigations into these companies, and subpoenas have been issued.
The companies suspended from the PERM program include Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies, and Capgemini, in addition to Microsoft and Adobe. These firms are among the largest IT outsourcing companies globally. The suspensions do not affect applications that have already been filed or approved, nor do they alter the current visa status of existing H-1B holders. However, the action potentially blocks a common pathway for thousands of foreign tech workers to gain permanent residency.
Microsoft responded to the announcement by stating that the "vast majority of Microsoft employees in the United States are Americans" and that the company "only files H-1B petitions for those who meet the rigorous standards of this visa category." The company also noted that 80% of its H-1B visa applications in the last fiscal year were for extending or changing the status of existing employees, not for hiring new ones. Adobe has not yet released a public statement regarding the suspension.
This action is part of a broader effort by the administration to reform visa programs and prioritize American workers. In parallel, the administration announced investigations into nine elite universities, including Harvard, Yale, and Stanford, for alleged misuse of exchange-visitor visas. Officials claim these universities may have exploited international students to reduce U.S. wage costs. The Department of Justice previously secured a $3.2 million settlement from OpenAI in August for similar allegations of under-advertising domestic job openings.