Microsoft suspended from govt program for H-1B workers

In a major escalation against American corporate foreign hiring, Vice-President JD Vance announced on Thursday that the Trump administration is suspending tech giant Microsoft from the federal program sponsoring foreign workers for permanent residency.

Vance said that the H-1B visa program is meant to allow companies to bring in the best of the best from outside the US "for positions that are completely impossible to fill with American workers", but it has been abused for decades.

IT companies are among the largest users of the Permanent Labor Certification (PERM) program, which allows companies to sponsor H-1B visa holders for employment-based green cards.

According to USCIS data, for fiscal year 2025, Amazon, TCS, Microsoft and Meta are the top four companies with the most H-1B visa approvals. Amazon was far ahead of others with over 10,000 approvals, while second place TCS had 5,500 approvals.

"Microsoft laid off last year 6,000 American workers. At the same time, the company benefited from 6,300 H-1B visas and almost 3,000 green cards," Vance said. "In other words, if you do the math, for every worker that Microsoft laid off, they replaced that worker with one and a half foreign indentured servants."

Vance said that he called those H-1B visa workers "indentured servants" because they will be deported if they get fired due to being "too uppity at work" and usually make $20,000 less than American workers, or $48,000 less if hired through foreign sourcing firms.

"Our message to Microsoft is: You're a great American company, but you've got to hire great American workers," Vance said. "I do not want companies to fire 9,000 American workers and then go and say they cannot find workers in America. That's a bullshit story."

Microsoft has previously stressed that roughly 78 percent of its annual H-1B filings represent extensions and renewals for long-tenured employees rather than new overseas hires, noting that visa holders were also impacted by layoffs as a result of AI reshuffling.

Other tech companies including Adobe, Cognizant, Infosys, Tata, Wipro, HCL Technologies and Capgemini are also suspended from the program, Labor Secretary Keith Sonderling said at the news conference. He said the total "visa fraud" amounted to $22 billion.

The Department of Labor will immediately pause and review pending PERM filings from the targeted companies.

Thursday's announcement is part of a sweeping regulatory offensive curbing high-skilled foreign hiring across the US economy. Just one day earlier, the Department of Homeland Security proposed a contentious $70,000 fee on universities and employers participating in the Optional Practical Training program for foreign STEM graduates.

President Donald Trump issued an executive order last month to extend a $100,000 fee on certain H-1B petitions until September 2027.

Labor Department Inspector General Anthony D'Esposito has initiated dozens of fraud inquiries targeting wage suppression and labor brokerage across the IT services sector.

Some applauded those interventions, contending that lax oversight has allowed tech companies to exploit legal loopholes at the expense of American workers.

"I worked in IT for over 35 year and there was never a shortage of skilled American workers," one online comment wrote. "They outsourced because it was cheap. One time my wife had to train four people from India to take her job."

John, a middle-level administrator at a Houston IT company, acknowledged that his company favored cheaper but harder-working foreign workers in some cases. He considered this the exact reason why the US companies are competitive.

"The H-1B visas are perhaps one of the major reasons that we have been a leader in tech innovations for the past couple of decades. The program has attracted the brightest from around the world," John said.

Vance said the government will also investigate J-1 visa fraud where "some of America's most elite universities bring in foreigners, again, to undercut the wages of American residents".

He listed nine universities that "we believe merit an investigation" — Harvard, Yale, Stanford, Brown, the University of Pittsburgh, UC Davis, Caltech, Arizona State and MIT.

He said these universities are employing J-1 visas for federally funded grants at a rate of 61 percent, while the national average is 38 percent.