Microsoft Temporarily Barred From Sponsoring Foreign Workers for US Residency

What changed

The US Labor Department has temporarily barred Microsoft, Adobe and six IT-services companies from sponsoring foreign workers through the PERM program, the route to permanent US residency. The affected companies are Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL and Capgemini.

Officials allege the companies abused immigration programs at the expense of American workers. The Labor Department says subpoenas have been served and investigations are under way. Microsoft disputes that characterization and says most of its US employees are American.

Why it matters

This is a company-specific restriction on future sponsorship through PERM, not an announced cancellation of existing permanent-residency cases. For the companies involved, it adds uncertainty to a process used to keep skilled employees in the US permanently.

The move also reaches beyond Microsoft. It targets major outsourcing firms with large international workforces, while the administration argues that H-1B visas and related immigration routes allow companies to undercut US workers. More than 400,000 H-1B visas were approved last year, making the wider system central to how technology companies staff specialist roles.

The immediate effect may be smaller than the rhetoric suggests. The route from H-1B status to permanent residency is already heavily constrained for many Indian workers: nearly 1 million people from India were waiting for employment-based permanent residency as of December last year, according to the cited study. India’s IT-services lobbying group also said employees transitioning through PERM were relatively limited, as Indian technology companies had reduced their reliance on H-1B visas.

That backlog changes the meaning of the suspension. It may not suddenly remove large numbers of workers from US offices. It does, however, make a long and uncertain immigration pipeline even harder for employers to plan around.

The political cost is already visible. India’s foreign ministry condemned the language used by US officials, saying it carried painful historical and colonial connotations and ignored the contribution of Indian professionals to the US economy and innovation ecosystem.

The duration and legal basis of the suspensions have not been stated, so their lasting workforce impact remains unclear. The next consequential step is whether the investigations produce penalties or a broader expansion of the restrictions.