Trump administration suspends Microsoft, Adobe and major outsourcers from US permanent residency sponsorship

The Trump administration has imposed a temporary suspension on Microsoft, Adobe, and several other major technology firms, preventing them from sponsoring workers for permanent US residency. Officials contend these companies have misused immigration pathways in ways that harm American workers.

During remarks on Thursday, Vice-President JD Vance characterized the H-1B visa program for specialized foreign talent as having "become rife with fraud" and described heavy reliance on such visas as "a fundamental insult to the American worker." He singled out Microsoft in particular, stating that "no company in the US" had "abused this system" more than the software giant.

Vance's assertion that Microsoft could not "lay off American workers and then replace them with foreign indentured servants" prompted a sharp rebuke from India's foreign ministry. The New Delhi government said on Friday that "resorting to terminology that carries painful historical and colonial legacy connotations is deeply offensive" and stressed that "Indian professionals in the United States are highly educated and skilled contributors to its economy and innovation ecosystem."

Beyond Microsoft and Adobe, six additional IT outsourcing firms have been barred from the Permanent Labor Certification, or Perm, program, which enables US employers to recruit foreign workers on a permanent basis. The suspended companies are Cognizant, Infosys, Tata, Wipro, HCL, and Capgemini.

Labor Department Inspector-General Anthony D'Esposito stated that "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."

Microsoft responded by noting that the "vast majority" of its US workforce consists of American citizens. Tata Consultancy Services, India's largest outsourcing company, countered that its approach prioritizes local hiring in the United States and that Perm applications totaled only "single digits in the last two years." Adobe, Tata, Cognizant, Infosys, Wipro, HCL, and Capgemini declined to comment further.

This action represents the latest component of a broader Trump administration campaign against immigration. The White House has previously targeted H-1B visas, which are extensively used across technology and specialized sectors.

In the prior year, the administration sought to impose a $100,000 fee on fresh H-1B applications. However, in June, a federal court determined that the fee constituted an unauthorized tax that violated Congress's constitutional authority over revenue collection. The Trump administration has filed an appeal of that decision.

Before the proposed fee increase, the government charged $215 to enter the H-1B visa lottery and $780 as a base fee for employers submitting visa applications on behalf of candidates. Last year, more than 400,000 such visas received approval.

While Indian nationals have constituted the largest share of H-1B visa recipients and the new restrictions target numerous major outsourcing firms headquartered in India, the practical effect is expected to be limited. The pathway from H-1B status to permanent residency has remained largely inaccessible to most Indian workers due to a decades-old processing backlog.

According to an August study by the National Foundation for American Policy, a nonprofit research organization, approximately 1 million individuals from India were awaiting employment-based permanent residency as of December of the previous year.

Nasscom, the industry association representing Indian IT services providers, characterized the number of workers advancing to permanent residency via Perm as "relatively limited," noting that Indian technology firms have "significantly reduced their dependence on H-1B visas."

During his Thursday remarks, Vance asserted that the visas enable corporations to suppress wages for American workers. He cited data suggesting that certain H-1B visa holders earn between $20,000 and $48,000 less annually than US citizens in comparable roles.

Amazon, which holds the distinction of being the largest consumer of H-1B visas, was not mentioned during the press conference. However, Vance directed specific criticism toward Microsoft, noting that the company "laid off last year 6,000 American workers at the same time the company benefited from 6,300 H-1B visas and almost 3,000 green cards," referring to permanent US residency status.

The White House also announced on Thursday a fraud investigation targeting the use of J-1 student visas at nine universities, including Harvard, Yale, and Stanford.

Following the announcement, Microsoft's stock price declined by more than 1 percent. The company stated that the visa applications referenced by Vance were primarily intended "to extend or change the status" of workers already employed by the firm.

Microsoft emphasized that it "only files H-1B petitions for those who meet the rigorous standards of this visa category" and highlighted that "we pay our employees some of the highest compensation in the tech sector, and our wages are among the highest of all H-1B filings."

In a separate event on Thursday, the Trump administration presented the National Medal of Technology and Innovation to Microsoft's chief executive, Satya Nadella, who was born in India. The honor was also bestowed on Elon Musk, who was born in South Africa, and Nvidia chief executive Jensen Huang, who was born in Taiwan.

When asked about the apparent contradiction between honoring Nadella and simultaneously restricting Microsoft's immigration sponsorship, Vance stated that there was no inconsistency. He said, "Our message to Microsoft is: 'You're a great American company, but you've got to hire great American workers.'"