The administration of US President Donald Trump has suspended Microsoft from a federal employment-based green-card sponsorship programme, accusing the technology giant of abusing immigration rules and replacing laid-off American workers with foreign employees. The restriction targets the Permanent Labour Certification (PERM) process, which employers must generally complete before sponsoring eligible foreign workers for employment-based permanent residency.
Key Highlights
- The Trump administration has suspended Microsoft’s participation in the federal PERM programme.
- US officials accuse Microsoft of benefiting from foreign-worker visas while laying off American employees.
- Labour Secretary Keith Sonderling says pending applications involving the affected companies will not be processed.
- Adobe and several major IT outsourcing firms are also reportedly affected.
- Microsoft disputes the criticism and says most of its US employees are Americans.
- The suspension affects green-card sponsorship, not an outright ban on hiring H-1B workers.
Trump Administration Accuses Microsoft of Immigration Abuse
US Vice President JD Vance announced the measure on Thursday, October 8, 2026, during a White House news conference addressing alleged abuses involving H-1B and J-1 visa programmes.
Labour Secretary Keith Sonderling said the US Department of Labour would stop accepting new Permanent Labour Certification applications involving the named companies and halt the processing of pending applications.
Vance singled out Microsoft, accusing the company of exploiting the system designed to ensure American workers receive fair consideration before employers sponsor foreign nationals for permanent residency.
“There has been no company in the United States, unfortunately, that has abused the system more than Microsoft,” Vance said.
He argued that employers seeking permanent residency for foreign workers must advertise positions domestically and demonstrate that qualified American workers are not available for the jobs.
According to Vance, some companies allegedly place job advertisements in small-town newspapers and subsequently use the lack of responses to support applications for foreign workers.
The administration has presented the suspension as part of its effort to prioritise American workers in employment and immigration decisions.
Vance Links Microsoft Layoffs to Foreign-Worker Hiring
Vance also questioned Microsoft’s employment decisions, alleging that the company laid off 6,000 American workers over the preceding year while benefiting from thousands of H-1B visa approvals and employment-based immigration applications.
He cited approximately 6,300 H-1B visas and nearly 3,000 green cards when criticising the company’s workforce practices.
“If you do the math, for every worker that Microsoft laid off, they replaced that worker with one and a half foreign indentured servants,” Vance said.
He also alleged that foreign visa holders were paid substantially less than American workers performing comparable jobs.
“Our message to Microsoft is: You’re a great American company, but you’ve got to hire great American workers,” he added.
However, the administration has not publicly released the underlying case file supporting Vance’s calculation or demonstrated that the visa figures correspond directly to workers who replaced employees made redundant.
A report by Newsweek, citing US Citizenship and Immigration Services and Labour Department figures, said Microsoft received 6,258 H-1B approvals in the previous fiscal year and filed 3,157 PERM applications.
Although the figures are broadly consistent with those cited by Vance, H-1B approvals and PERM filings represent different stages of the immigration process. They do not, by themselves, establish that foreign workers directly replaced laid-off American employees.
Adobe, IT Firms Also Face Restrictions
Microsoft is not the only company named in the administration’s action.
Sonderling said Adobe had also been suspended from the programme, citing multiple active federal investigations.
The restrictions reportedly extend to major IT outsourcing companies, including Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini.
The measures are linked to Project Firewall, a Labour Department initiative targeting alleged violations of rules governing employment-based visa programmes.
Reuters reported that the initiative had opened approximately 200 cases and imposed millions of dollars in penalties.
US officials also said nine universities, including Harvard University, Yale University and Stanford University, were under investigation over alleged misuse of exchange-visitor visas.
The investigations and suspensions concern allegations of programme abuse; the existence of an investigation does not, on its own, establish wrongdoing.
Microsoft Responds to US Government Allegations
Microsoft pushed back against the criticism, saying the vast majority of its US workforce consists of American employees.
The company said it files H-1B petitions only for individuals who meet the programme’s requirements and that its workforce strategy includes developing domestic talent, hiring American workers and recruiting internationally.
Microsoft also indicated that it would provide the administration with additional information about how it uses the immigration programme.
Adobe had not immediately commented on the action in early reports.
Vance said the restrictions would remain in place for as long as necessary, adding that the administration had options to suspend participation indefinitely.
He also said the government would continue engaging with Microsoft but would withhold permanent-residency applications until the company demonstrated a commitment to prioritising American workers.
Read also:
- Microsoft Cuts 4,800 Jobs As Xbox Undergoes Massive Restructuring Amid AI Push
- U.S. tightens noose on visa applications, imposes $100,000 fee on skilled foreign workers
- H-1B Visa renewals to require in-person interview from September as B1/B2 waiver remains in place
What the Suspension Means for H-1B Workers
The suspension does not amount to a blanket ban on Microsoft employing H-1B visa holders. Instead, it affects the PERM process, a key step employers generally need to complete when sponsoring foreign workers for employment-based green cards in applicable categories.
H-1B visas allow eligible foreign professionals to work temporarily in the United States in specialty occupations. PERM, by contrast, is a labour-market certification process intended to establish that hiring a foreign worker under the relevant employment-based category will not adversely affect American workers’ wages and working conditions.
For eligible Microsoft employees seeking permanent residency through an employer-sponsored route requiring PERM certification, the suspension could delay or block progress while the restriction remains in force.
The practical impact will depend on the scope and duration of the suspension, the status of individual applications and whether alternative immigration routes are available.
US Tightens Restrictions on Skilled Immigration
The action comes amid wider efforts by the Trump administration to tighten oversight of skilled-worker immigration programmes.
Those measures include a $100,000 fee on certain new H-1B petitions under a White House proclamation, alongside increased scrutiny of employers’ use of foreign labour.
The latest restrictions are likely to draw attention from technology companies that rely on international recruitment to fill specialised positions, as well as foreign professionals seeking long-term employment and residency in the United States.
For now, Microsoft’s participation in the affected green-card sponsorship process remains restricted, while the administration’s allegations and the company’s response continue to shape the dispute.
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