The Labor Department action blocks Microsoft and several other technology companies from using a key employment-based permanent residency process.
WASHINGTON, DC — The Trump administration on Thursday suspended Microsoft and several other major technology companies from a federal labor-certification program used to sponsor foreign workers for permanent U.S. residency, with Vice President JD Vance alleging that the companies had abused employment-based immigration programs.
The action announced Oct. 8 targets the Department of Labor’s Permanent Labor Certification Program, commonly known as PERM. It does not amount to a general suspension of Microsoft’s ability to employ workers through the separate H-1B visa program. Instead, it restricts a key step that employers commonly use when seeking employment-based green cards for foreign workers, including many people already working in the United States on H-1B visas.
Labor Secretary Keith Sonderling said the government would halt new and pending permanent labor certification applications involving Microsoft, Adobe and several large information technology companies. Officials also named Cognizant, Infosys, Tata, Wipro, HCL and Capgemini. The administration characterized the action as part of a broader effort to investigate suspected fraud and protect U.S. workers, but officials had not publicly established that the companies committed fraud in individual cases.
Vance focused much of his criticism on Microsoft. He said the company laid off 6,000 American workers during the previous year while also obtaining 6,300 H-1B visas and nearly 3,000 green cards. Those figures were presented by Vance as evidence that Microsoft’s use of foreign-worker programs deserved greater scrutiny. The administration did not publicly release case-by-case evidence showing that the workers who received visas or permanent residency directly replaced the employees who were laid off. Microsoft did not immediately respond to requests for comment reported by several news organizations Thursday.
“Our message to Microsoft is: You’re a great American company, but you’ve got to hire great American workers,” Vance said. He argued that companies have used foreign-worker programs to undercut American employees. Critics of the H-1B system have made similar arguments for years, saying workers whose legal status is tied closely to an employer can have less bargaining power. Technology companies and immigration advocates have countered that skilled-worker visas help U.S. employers recruit specialized talent that can be difficult to find domestically.
The PERM process is distinct from obtaining an H-1B visa. Under the permanent labor certification system, an employer generally must complete a recruitment process and demonstrate that hiring a foreign worker for a permanent position will not adversely affect the wages and working conditions of U.S. workers. An approved labor certification can then support later steps in an employment-based permanent residency application. The Labor Department has authority under federal regulations to act when it identifies suspected fraud or willful misrepresentation connected to the certification program.
The department used that authority earlier in 2026 when it suspended processing of permanent labor certification applications involving software company Cloudera for 180 days. The Labor Department said at the time that the action followed evidence obtained in a Justice Department investigation alleging problems with the company’s recruitment process. Cloudera was accused of preventing qualified U.S. workers from applying for certain technology jobs while representing that qualified American workers were unavailable. That separate case shows how federal officials can suspend PERM processing while an investigation is underway.
Thursday’s announcement also widened the administration’s scrutiny beyond Microsoft. Officials said nine universities, including Harvard, Yale and Stanford, would face investigations over allegations involving the J-1 exchange visitor program. Labor Department Inspector General Anthony D’Esposito said subpoenas had been issued. Those allegations involve a different immigration program and remain under investigation.
The Microsoft action comes as President Donald Trump’s administration continues efforts to tighten employment-based immigration programs and increase scrutiny of employers that rely heavily on foreign workers. The administration has argued that enforcement is needed to prevent companies from using immigration programs to lower labor costs or bypass qualified U.S. applicants. Employers and immigration advocates have warned that restrictions on skilled-worker pathways can make it harder for U.S. companies to recruit and retain specialized workers.
The immediate effect for Microsoft is on the permanent labor certification process rather than the underlying H-1B status of its current workers. Pending and future PERM cases involving the company could be disrupted while the suspension remains in place. As of Thursday, officials had not publicly released a detailed finding establishing fraud by Microsoft, the full duration of the suspension or the final outcome of the government’s investigation.
Author note: Last updated October 8, 2026.