The Trump administration suspended Microsoft, Adobe, Cognizant, Infosys, and several other technology and IT services firms from the federal permanent labor certification program, which allows companies to sponsor foreign-born workers for U.S. permanent residency3,4. The suspension, announced Thursday by Vice President JD Vance, was cited as being due to alleged fraud.
Vance singled out Microsoft during a news conference, stating the company laid off 6,000 workers last year while benefiting from 6,300 H-1B visas and almost 3,000 green cards. "For every worker that Microsoft laid off, they replaced that worker with one and a half foreign indentured servants," Vance said.
Scope of the ban
The permanent labor certification program is administered through the Department of Labor and allows companies to hire foreign workers to live permanently in the United States. Vance said the suspension would affect hundreds of companies owned by Microsoft, including LinkedIn, Skype, and Activision Blizzard. Beyond Microsoft and Adobe, Vance called out and suspended Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL, and Capgemini.
"We want you to continue to grow and to employ a lot of people, but we want you to employ American workers," Vance said.
Microsoft pushes back
Microsoft denied Vance's characterization, saying most of its H-1B applications were for existing employees rather than replacements for laid-off American workers2. The company disputed the claim that it replaced thousands of U.S. workers with foreign workers last year.
President Donald Trump was set to award Microsoft CEO Satya Nadella with the National Medal of Technology and Innovation at the White House on the same day.
AI workforce implications
Vance said Microsoft owns hundreds of companies. ANALYSIS The suspension's reach across those subsidiaries cuts into the talent pipeline that Microsoft relies on to staff technical roles, including in AI research and engineering. The inclusion of major IT outsourcers such as Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL, and Capgemini extends the disruption across the services layer that supports enterprise AI deployments.
Microsoft's rebuttal, that most H-1B filings covered workers already employed, frames the dispute as a factual disagreement over whether the visas facilitated replacement hiring or retention of existing staff. The administration's fraud allegation, if substantiated, could expose the suspended firms to further enforcement action beyond the certification freeze.