On 8 October 2026, the US Labor Department stopped processing green card sponsorships from Microsoft, Adobe and six IT outsourcers, including four Indian giants, citing alleged visa abuse.
The suspension covers the Permanent Labor Certification programme, known as PERM, which is the first step for most employer-sponsored green cards. Besides Microsoft and Adobe, it applies to Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini. The Labor Department will not accept new applications from these companies and has stopped work on pending ones.
The move affects foreign professionals already working in the United States who were counting on these employers to sponsor them for permanent residency. Their H-1B work visas remain valid. However, their green card cases have stalled, and H-1B extensions that depend on a pending PERM case could be delayed.
Labor Secretary Keith Sonderling said the six IT services firms were suspended because of concerns about systemic abuse, while Microsoft and Adobe are subject to multiple active federal investigations. No charges have been announced against any of the companies.
Vice President JD Vance focused on Microsoft at the announcement. He said the company cut 6,000 American jobs in 2025 while receiving 6,300 H-1B visa approvals and almost 3,000 green cards. He also said Microsoft filed 3,682 PERM applications, about 1,000 of which appeared to overlap with roles held by laid-off staff. Vance said each worker Microsoft let go had been replaced by one and a half foreign workers, whom he likened to indentured servants.
Microsoft rejected the picture in a statement, saying “the vast majority of Microsoft employees in the United States are Americans.” The company said it filed petitions only for workers who met the visa category’s standards and that its H-1B wages are among the highest of all filings. It also said most of its applications were for people already on its payroll.
Asked why President Donald Trump honoured Microsoft chief executive Satya Nadella on the same day, Vance said Washington would keep its good relationship with the company. He said the government would still block its permanent residency applications until it showed it was serious about putting American workers first.
The suspension has no fixed end date. Sonderling said it would last as long as needed and that the administration wanted the companies to change their behaviour. The announcement came less than four weeks before the 3 November midterm elections, as the administration steps up action on immigration and foreign hiring.
For India’s outsourcing industry, the blow was not the first. On 8 September, Labor Department Inspector General Anthony D’Esposito suspended Cognizant’s PERM filings. The next day, Indian IT stocks lost about 550 billion rupees in market value, with Infosys falling about six per cent.
The suspensions stem from an investigation into fraud in the H-1B and PERM programmes that the inspector general opened in July. Officials said in July that dozens of subpoenas had been issued and that whistleblowers had flagged some of the largest sponsoring companies.
