The US Department of Labor suspended Microsoft and Adobe from its Permanent Labor Certification program on Thursday, citing multiple active federal investigations.
The program, known as PERM, is the step where employers certify that no qualified US worker is available for a job before a foreign employee can pursue a green card.
Six large IT outsourcing firms were suspended alongside them, including Cognizant, Infosys, Wipro, Capgemini, Tata, and HCL.
The Labor Department won't accept new applications or process pending ones involving any of the named companies, Labor Secretary Keith Sonderling said.
Vice President JD Vance, who chairs the administration's anti-fraud task force, singled out Microsoft.
An investigation found Microsoft laid off roughly 6K American workers last year while employing 6.3K non-citizens brought in on H-1B visas, Vance said.
"You're a great American company, but you've got to hire great American workers."
JD Vance, Vice President of the United States
The numbers behind the crackdown
Since 2009, the suspended companies have requested almost 3M foreign workers, received over 230K H-1B approvals, and secured over 100K permanent labor certifications, per Sonderling.
H-1B visas cover highly skilled roles that employers say they struggle to fill domestically, and tech firms are the heaviest users.
Nearly three-quarters of approved visas go to workers from India.
Officials used the same announcement to criticize universities over J-1 student visas and to target IT outsourcing firms broadly.
Microsoft did not immediately respond to a request for comment.
An escalating fight with Big Tech
The administration has clashed with the technology industry over skilled-worker visas since President Donald Trump returned to office.
Some policy shifts have been walked back, including a May announcement that H-1B holders would need to apply for permanent residency from outside the US.
The timing was awkward. Hours after the announcement, Trump was scheduled to award the National Medal of Technology and Innovation to Microsoft CEO Satya Nadella.
The suspension is indefinite, with no published timeline for review or reinstatement.
For investors, the direct cost is hiring friction rather than a line item. Outsourcing firms like Infosys and Cognizant build their US delivery models around visa-dependent staff, making the block more disruptive to them than to Microsoft.
The move lands weeks before November's midterm elections, as the administration leans harder into immigration enforcement.
Retention is the next question. Employees already in the US on H-1B visas rely on PERM to stay long term, and a frozen pipeline gives them a reason to look elsewhere.
