The Trump administration has suspended Microsoft and several major Indian and global technology companies from the US employment-based green card process, escalating its crackdown on alleged abuse of foreign-worker programmes and putting another hurdle in the path of thousands of skilled professionals seeking permanent residency.

The US Department of Labor said Thursday it would stop accepting or processing new and pending applications under the Permanent Labor Certification Programme, or PERM, involving Microsoft, Adobe, Cognizant, Infosys, Tata, Wipro, HCL and Capgemini. The companies were named by Labor Secretary Keith Sonderling, who said the action was linked to multiple active federal investigations.

The move does not amount to a suspension of H-1B visas themselves. Instead, it targets PERM, a labour-certification process that is generally required before an employer can file for many employment-based green cards. Under PERM, companies must establish that they have tested the US labour market and that there are no qualified, willing and available American workers for the particular permanent position.

The decision is therefore particularly significant for foreign professionals already working in the US on H-1B visas who are being sponsored by their employers for permanent residency.

Vance targets Microsoft over layoffs and foreign-worker hiring

Vice President JD Vance singled out Microsoft while announcing the crackdown, accusing the company of exploiting the system by laying off American workers while continuing to use foreign-worker programmes.

Vance said Microsoft laid off about 6,000 American workers in 2025 but obtained roughly 6,300 H-1B visas and nearly 3,000 green cards. He argued that the figures showed a contradiction between the company’s workforce reductions and its continued reliance on foreign workers.

Vance also said Microsoft had filed 3,682 PERM applications, with nearly 1,000 involving positions from which American workers had been laid off, according to India Today.

“The H-1B visa programme is meant to allow companies to bring in really the best of the best from outside the United States of America for positions that are completely impossible to fill with American workers,” Vance said.

He accused Microsoft of effectively using the system to replace American employees with foreign workers and described H-1B workers as vulnerable because losing their jobs can put their immigration status at risk.

“Our message to Microsoft is: You’re a great American company, but you’ve got to hire great American workers,” Vance said.

Microsoft did not immediately respond to requests for comment from news organisations.

The administration’s decision comes at an unusual moment for Microsoft. Trump was scheduled to present Microsoft CEO Satya Nadella with the National Medal of Technology and Innovation on Thursday, hours after the administration announced the suspension.

The action also follows an earlier escalation against IT companies. In September, the Labor Department suspended Cognizant’s PERM filings amid an investigation into alleged fraud and misuse of employment-based immigration programmes. US authorities did not initially disclose the specific allegations or the number of applications affected.

Why the move matters for Indian IT workers

The inclusion of Infosys, Tata, Wipro, HCL and Cognizant makes Thursday’s announcement particularly consequential for Indian technology professionals.

Indian nationals account for a dominant share of H-1B beneficiaries. The visa allows US employers to employ foreign workers in specialised occupations, and technology companies have historically been among its biggest users. AP reported that nearly three-quarters of H-1B approvals go to workers from India.

PERM is different from H-1B. An H-1B visa provides temporary employment status, while PERM is generally an employer’s labour-certification step toward permanent residency for an eligible foreign employee.

That distinction is crucial because Thursday’s action does not automatically cancel an Indian worker’s existing H-1B visa or revoke an already-issued green card.

It can, however, disrupt the progression of employees whose employers have not yet completed the PERM stage of their green card sponsorship.

The consequences could be particularly serious for some H-1B holders approaching the normal six-year limit. Under US immigration rules, certain workers can obtain extensions beyond six years when their employment-based green-card process has reached specified stages. A prolonged inability to initiate or advance PERM can therefore become an important immigration issue for workers nearing those deadlines.

Indian professionals also face an unusually long employment-based green card backlog. The September 2026 US Visa Bulletin listed the EB-2 category for India as unavailable for final action, while the EB-3 final-action date for India was January 1, 2014.

That means the new PERM restrictions are hitting workers at a stage where many already face years of waiting before a green card can become available.

Crackdown extends beyond technology companies

The Labor Department’s action is part of a wider immigration crackdown that is no longer limited to H-1B workers.

Vance and Labor Department officials also announced investigations into nine universities, including Harvard, Yale and Stanford, over allegations involving international students and programmes used to bring foreign nationals into the US.

Labor Inspector General Anthony D’Esposito said subpoenas had already been served and that investigators would examine whether foreign influence, improper financial relationships or visa abuse were compromising federally funded research.

The administration has separately moved to tighten restrictions affecting international students. A proposal announced this week would require schools to pay a $70,000 fee for each international student participating in the Optional Practical Training programme, which permits eligible foreign students to work in jobs related to their studies.

The broader policy shift also includes restrictions on new H-1B entrants. A September presidential proclamation extended for another year a requirement under which covered H-1B petitions for workers outside the US must be accompanied by a $100,000 payment, subject to stated exceptions. The administration has justified the restrictions by arguing that the H-1B system has been used to replace American workers and suppress wages.

For Indian IT companies, the latest action therefore creates a new layer of uncertainty. The immediate issue is not the cancellation of H-1B visas, but the suspension of a key route through which employers seek permanent residency for foreign employees.

The administration’s allegations against the companies have not, however, been established as wrongdoing by a court, and officials have not publicly detailed individual allegations against every company named in Thursday’s announcement.

For thousands of Indian professionals, the practical question is now whether their employers can resume PERM filings after the federal investigations are completed — and how long the resulting disruption will last.