What just happened? Vice President JD Vance announced Microsoft has been suspended from a federal program used to sponsor foreign workers for green cards. The administration claims that the Redmond giant abused the system while cutting American jobs. However, Microsoft's defense is that most of its visa applications were for people already working there.
The suspension targets the Permanent Labor Certification program, better known as PERM. Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies, and Capgemini are also affected. Labor Secretary Keith Sonderling said officials would stop accepting new applications and processing pending ones from the companies.
PERM is a step toward many employment-based green cards, requiring employers to demonstrate that qualified, willing US workers are unavailable for a position. While the suspension blocks that route to permanent residency, it does not shut down the H-1B program or automatically cancel existing workers' visas.
"Our message to Microsoft is, you're a great American company, but you've got to hire great American workers," Vance said.
The vice president said Microsoft laid off 6,000 American workers last year while benefiting from 6,300 H-1B approvals and almost 3,000 green cards. He also claimed that around 1,000 of its 3,682 PERM applications involved positions that appeared to overlap with jobs eliminated in layoffs.
Microsoft's response was that 80% of roughly 6,000 H-1B applications submitted in its last fiscal year concerned existing employees.
"These were not to hire new people," the company said. "Microsoft succeeds as a global technology leader by developing the world's best technology workforce. We do this by strengthening this country's talent pipeline, hiring American workers, and attracting the best talent from around the world."
Microsoft added that it pays H-1B employees the same as colleagues doing comparable work.
Supporters argue that foreign workers help US companies fill specialist roles and compete for talent globally, while critics say the programs can undercut American wages and hiring.
Trump has targeted these programs before. In 2020, tech giants condemned his restrictions on temporary work visas, warning they would damage US competitiveness. His administration escalated the pressure in September 2025 by announcing a $100,000 fee for new H-1B applications, prompting major employers, including Microsoft, to warn affected staff against international travel.
No end date has been announced for the suspension. Vance said its duration would depend on how long officials considered necessary, while pushing the companies to change their hiring practices.
In an example of some very bad timing, President Trump honored Microsoft CEO Satya Nadella with the National Medal of Technology and Innovation just hours after the announcement.
