Microsoft barred from sponsoring foreign workers for US residency

The Trump administration has temporarily banned Microsoft, Adobe, and six other major tech and outsourcing companies from sponsoring foreign workers for permanent US residency, citing alleged abuse of immigration programs.

Vice President JD Vance announced the suspension on Thursday, claiming the H-1B visa program for highly skilled foreign workers had "become rife with fraud." Vance stated that Microsoft had "abused this system" more than any other US company, pointing to the fact that Microsoft laid off 6,000 American workers last year while benefiting from 6,300 H-1B visas and nearly 3,000 green cards.

The ban applies to the Permanent Labor Certification, or Perm, program, which allows employers to hire foreign workers on a permanent basis. Microsoft, Cognizant, Infosys, Tata, Wipro, HCL, and Capgemini were all suspended. Labor Department Inspector General Anthony D'Esposito said subpoenas had been served and investigations were underway.

Vance argued that some H-1B visa holders earned between $20,000 and $48,000 less than US citizens in similar roles, and described the practice as preventing companies from "laying off American workers and then replacing them with foreign indentured servants." That language drew a sharp rebuke from India's foreign ministry, which called the "indentured servants" terminology "deeply offensive" and noted it carried "painful historical and colonial legacy connotations."

Microsoft disputed the characterization, saying the vast majority of its US employees are American and that visa applications mentioned by Vance were largely to "extend or change the status" of existing employees. The company also noted it pays some of the highest compensation in the tech sector. Microsoft's stock dropped more than 1 percent after the announcement.

Tata Consultancy Services said its Perm applications numbered in the "single digits in the last two years" and that its strategy centered on hiring locally in the US.

The suspension marks the latest step in the Trump administration's broader crackdown on immigration. Indians have been the largest recipients of H-1B visas, though the practical impact of this ban may be limited. Nearly 1 million people from India are waiting for employment-based permanent residency, according to a National Foundation for American Policy study, meaning the route from H-1B to permanent residency has been largely inaccessible for most Indian workers.

The administration also announced a fraud investigation into J-1 student visa use at nine universities, including Harvard, Yale, and Stanford.

Notably, the White House awarded Microsoft CEO Satya Nadella, who was born in India, the National Medal of Technology and Innovation on the same day. Vance said there was no contradiction between the announcements.