The Trump administration suspended Microsoft, Adobe and six major IT outsourcing firms from the PERM green card program on Thursday, while opening investigations into nine top universities over their use of J-1 exchange visas.
Vice President JD Vance announced the Microsoft suspension at a White House press conference, accusing the company of fraud and saying that for every US worker Microsoft laid off last year, it replaced that worker with “one and a half foreign indentured servants.” Labor Secretary Keith Sonderling named the rest: Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini. The eight firms are now barred from sponsoring employment-based green cards through PERM, the permanent labor certification step that sits at the front of most US employment-based residency cases.
“We will not accept any new or process any pending permanent labor certification applications involving these companies,” Sonderling said. Microsoft was the largest PERM filer in the country, according to Labor Department data through June 2026, which made it the headline name even though the outsourcing firms placed more foreign workers on US client projects in aggregate.
“There has been no company in the United States, unfortunately, that has used this system more than Microsoft,” Vance said, describing the job postings the program requires as ads placed only for the record.
Under PERM, an employer must show a foreign hire will not hurt US workers’ wages or jobs, and the administration argued companies game that test by placing deliberately ineffective ads, such as listings in small-town papers that no qualified applicant would see. Vance said Microsoft laid off 6,000 US workers last year while obtaining roughly 6,300 H-1B visas and close to 3,000 green cards in the same period. The suspensions, he said, would last “as long as it needs to,” an open-ended formulation with no published criteria for being lifted.
Microsoft pushes back, Cognizant repeats a pattern
Microsoft issued a statement the same day contesting the characterization. “These were not to hire new people,” the company said of its remaining green card filings, describing them as covering individuals already legally in the US, equal to only 1 percent of its American workforce. “They are not new arrivals to our country.” The other seven named firms did not immediately respond to requests for comment, and Tata Consultancy Services declined to comment.
Cognizant has been through this once already. In early September 2026, the Labor Department’s inspector general stopped new PERM filings from the outsourcing firm pending an inquiry. The October 8 action extended the same treatment to seven more employers in one announcement, converting what had looked like a single-company enforcement action into a sector-wide freeze.
What the suspension actually does
The freeze covers PERM only, not visas themselves. Workers at the named companies keep their current H-1B status and right to work, and employers can still file visa petitions, but a common route to permanent residency is now closed for new cases and stalled for the ones already in the pipeline. Immigration lawyers said the sharpest risk falls on employees approaching the typical six-year H-1B limit without an earlier green card filing, since PERM delays can push them past the point where an extension is possible.
The government has set no end date. Reports point to federal labor regulation 20 CFR 656.31 as the likely authority, which lets the Labor Department pause an employer’s pending cases during a fraud investigation, with an initial hold of up to 180 days that can then be extended until any investigation or court case ends. No written public notice had been posted as of Saturday, which immigration practitioners flagged as unusual for an action of this scale.
The university probes
In the same announcement, the administration said nine universities would be investigated for misuse of the J-1 exchange-visitor program, which brings foreign students, teachers and researchers into the US for temporary stays. The named schools include Harvard, Yale and Stanford. State Department officials said subpoenas had already been served, and Attorney General Todd Blanche appeared alongside Vance, signaling Justice Department involvement in the wider effort.
The two actions together mark the broadest strike yet on skilled-worker immigration pathways, cutting off a common route to permanent residency for tens of thousands of foreign tech workers while putting the most prominent US research universities on notice. Since taking office, Trump has pursued a sustained reduction in both legal and undocumented immigration, and the tech sector, long the largest user of H-1B visas, has become the sharpest point of that campaign.
Industry fallout ahead
The named outsourcing firms together place tens of thousands of workers on client projects across the US, from banks to healthcare systems, and permanent residency sponsorship is a standard retention tool for staff who come in on H-1B. Losing PERM access, even temporarily, creates a bottleneck that may push the firms to shift more delivery offshore or to Canada, where immigration timelines are faster. US consulting clients could see visa-dependent staff rotate out of projects on shorter notice.
For Microsoft and Adobe, the freeze is a reputational hit layered onto a hiring model already under political pressure, with higher H-1B fees and tighter student visa vetting already in place. Vance said the suspensions would remain until the administration’s concerns were addressed, a formulation that leaves the definition of satisfaction in the government’s hands. For the affected workers, the practical question is months of delay at minimum; for the firms, it is a compliance question with no published off-ramp.
The PERM freeze lands while Congress debates longer-term changes to skilled-worker law. Nothing in the underlying statute changed on Thursday. The administration is using existing regulatory powers, and the next chapter depends on how investigators, courts and the companies respond in the months ahead.