The Labor Department has suspended eight major technology and outsourcing companies from sponsoring foreign employees for permanent residency, citing alleged misuse of immigration programs and concerns that American workers are being displaced.
By yourNEWS Media Newsroom.
WASHINGTON — The Trump administration announced Thursday, Oct. 8, that eight major technology and information technology outsourcing companies will be barred from submitting new permanent labor certification applications or advancing pending cases, escalating federal efforts to prioritize American workers in the technology industry.
Vice President JD Vance and Labor Secretary Keith Sonderling announced the restrictions during a White House news conference, identifying Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini as companies suspended from the Permanent Labor Certification Program, commonly known as PERM.
The decision immediately affects a major pathway through which employers sponsor foreign workers for employment-based green cards. Federal officials accused the companies of taking advantage of immigration programs while American technology professionals face layoffs and competition for available positions.
The administration’s action does not constitute a blanket prohibition on hiring foreign nationals or automatically revoke existing H-1B visas. Instead, it prevents the affected employers from obtaining the labor certifications generally required to sponsor foreign employees for permanent residency through certain employment-based immigration categories.
As reported by The Hill following the White House announcement, Vance singled out Microsoft, accusing the company of making extensive use of foreign labor programs while eliminating American jobs.
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“There has been no company in the United States, unfortunately, that has abused this system more than Microsoft,” Vance said.
The vice president said the administration supports continued investment and expansion in the American technology industry but expects corporations benefiting from the U.S. economy to provide more employment opportunities to domestic workers.
“We want people to invest in the United States of America, particularly the American technology sector. We are the biggest boosters of your industry. We want you to continue to grow and to employ a lot of people, but we want you to employ American workers,” Vance said.
The announcement represents one of the administration’s most significant actions against corporate participation in employment-based immigration programs, targeting both American technology companies and multinational outsourcing firms that employ substantial numbers of foreign professionals.
Sonderling said the Labor Department would stop accepting new PERM applications from the designated employers and suspend processing of applications already submitted.
“We will not accept any new or process any pending permanent labor certification applications involving these companies,” the labor secretary said.
The suspension applies to six major outsourcing companies — Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini — as well as Microsoft and Adobe.
Sonderling said Microsoft and Adobe were being suspended amid multiple active federal investigations, while the administration’s broader enforcement effort also targets outsourcing companies whose recruitment and employment practices have drawn scrutiny.
The government has not publicly established that every company named committed fraud, and the announcement itself does not constitute a final judicial finding of wrongdoing.
However, federal officials maintain that employment and immigration records demonstrate patterns warranting immediate restrictions.
Sonderling cited figures covering the period since 2009, saying the eight companies collectively sought authorization to employ millions of foreign workers.
“Since 2009, just these companies alone have requested almost three million foreign workers. They’ve received over 230,000 H-1B visa approvals and over 100,000 permanent labor certifications,” Sonderling said.
“That’s hundreds of thousands of jobs that were taken from American workers,” he added.
The figures were presented by the administration as evidence of the companies’ extensive participation in foreign labor programs.
However, the number of visa petitions or labor certifications does not independently establish that an equivalent number of American workers lost employment. Determining displacement would require evidence concerning particular job openings, qualified domestic applicants, hiring decisions and whether positions would otherwise have been filled by U.S. workers.
Some applications may also involve extensions, changes in employment circumstances or different stages of a foreign worker’s immigration process.
Nevertheless, the scale of the filings has become central to the administration’s argument that existing immigration rules have been used to the disadvantage of American technology professionals.
The PERM process is administered by the Department of Labor and serves as an initial step for many employment-based green card applications.
Before sponsoring a foreign worker for certain permanent positions, employers generally must demonstrate that they have conducted required recruitment efforts and that there are no qualified, willing, available and able U.S. workers for the position at the prevailing wage.
The process also requires employers to establish that hiring the foreign worker will not adversely affect the wages and working conditions of similarly employed U.S. workers.
Once certification is approved, the employer may proceed with an immigrant petition through U.S. Citizenship and Immigration Services. Additional requirements, including visa availability and eligibility for adjustment of status or consular processing, must be satisfied before a worker can obtain permanent residency.
Because labor certification is required for many employment-based green card categories, suspending access to PERM can substantially disrupt companies’ ability to sponsor foreign employees for permanent residence.
The consequences may be particularly significant for workers who are already employed in the United States under temporary visas and are relying on their employers to sponsor them for green cards.
For many technology professionals, the H-1B visa is the initial employment authorization used before pursuing permanent residency.
The H-1B program permits eligible U.S. employers to hire foreign workers in specialty occupations that generally require specialized knowledge and a qualifying educational background.
Technology companies and information technology consulting firms have historically been among the program’s largest users.
The administration’s new PERM restrictions are distinct from the H-1B program itself, although the two systems frequently intersect when an employer sponsors an existing H-1B employee for permanent residence.
Without access to PERM, affected companies could face obstacles advancing certain employees toward green cards, even if those workers retain valid temporary employment authorization.
The precise implications will depend on individual immigration circumstances, including visa validity, previously approved petitions and whether another employment-based pathway is available.
Federal officials have not announced when the suspensions might be lifted or what requirements the companies would need to satisfy to regain access.
The policy could affect thousands of foreign technology workers, particularly those from India who face lengthy employment-based green card backlogs because of annual numerical limits and country-specific allocation rules.
Large outsourcing companies, including Infosys, Tata Consultancy Services and Wipro, have built extensive operations serving American businesses through software development, technical support, consulting and other information technology services.
Their participation in temporary and permanent employment immigration programs has generated repeated disagreements over whether foreign labor supplements the domestic workforce or allows employers to reduce labor costs.
Critics of the programs argue that some companies use foreign workers to fill positions that qualified Americans could perform, potentially weakening bargaining power and suppressing wages.
Employers and supporters of skilled immigration maintain that access to international talent helps address shortages in specialized occupations, supports innovation and enables companies to expand U.S. operations.
Both arguments depend on labor market conditions, the occupations involved and the employment practices of individual companies.
The latest restrictions are being introduced against a backdrop of layoffs and restructuring throughout the American technology sector.
Major companies have reduced staffing in certain divisions while increasing spending on artificial intelligence, cloud infrastructure and other emerging technologies.
Those simultaneous trends have created disagreements over whether employers should receive permission to sponsor additional foreign workers while some experienced American professionals struggle to find new positions.
Vance directly addressed those concerns, arguing that technology companies should not replace dismissed U.S. employees with foreign workers.
“Our message to Microsoft is: You’re a great American company, but you’ve got to hire great American workers,” he said, according to Reuters’ reporting on the announcement.
“You cannot lay off American workers and then replace them with foreign indentured servants,” Vance added.
The vice president’s remarks reflect the administration’s position that foreign labor programs require stronger enforcement to prevent employers from using immigration status as a means of obtaining less expensive or more dependent workers.
The White House announcement also included additional investigations involving American universities accused of potentially misusing exchange visitor programs.
Sonderling said nine universities, including Harvard, Yale and Stanford, would face investigations concerning their use of J-1 visas.
Other institutions identified in reporting about the initiative include the Massachusetts Institute of Technology and Brown University.
The J-1 exchange visitor program permits eligible foreign nationals to participate in approved educational, research, training and cultural exchange activities.
Federal officials are examining whether participating universities have used the program in ways that could undermine wages or displace American workers.
Labor Department Inspector General Anthony D’Esposito said subpoenas had already been served as part of the investigations.
“We will investigate whether foreign influence, improper financial relationships, or visa abuse are compromising federally funded research,” D’Esposito said.
“If an American university is breaking the law to save $1 while exposing American research to a foreign adversary, that is not academic excellence. It’s institutional betrayal.”
The allegations concerning the universities remain under investigation, and the announcement did not establish that the institutions had been found guilty of violating federal law.
The action against technology companies follows several other initiatives undertaken by the Trump administration to increase oversight of employment-based immigration.
Federal officials have sought to tighten requirements involving H-1B visas, revise immigration fee structures and increase scrutiny of programs allowing international students and other foreign nationals to work in the United States.
The administration has also announced enforcement efforts aimed at identifying fraudulent labor certifications and ensuring that employers comply with required recruitment procedures.
One such initiative, known as Project Firewall, was established to strengthen investigations into potential H-1B program abuses and expand the Labor Department’s role in identifying employers suspected of violating wage and labor requirements.
The administration has additionally imposed a $100,000 payment requirement on certain new H-1B petitions, a measure intended to discourage employers from relying on foreign workers when American candidates are available.
Those changes have drawn criticism from business organizations and immigration advocates who argue that additional restrictions could increase costs and interfere with companies’ ability to recruit workers with specialized technical expertise.
Supporters of the administration’s policies counter that existing immigration pathways must be enforced in a manner that prevents wage suppression and protects American applicants.
The decision to suspend major companies from PERM marks a further escalation because it directly restricts access to a critical stage of employment-based permanent immigration.
The announcement also attracted substantial attention from conservative commentators who described the restrictions as a fulfillment of Trump’s campaign promises to prioritize domestic employment.
Eric Daugherty, chief content officer at Right Line News and Florida’s Voice, highlighted the administration’s announcement in an Oct. 8 statement, identifying the eight affected companies and emphasizing the government’s figures on foreign labor applications.
“JUST IN: Effective immediately the Trump administration has hereby SUSPENDED ADOBE, MICROSOFT, Cognizant, Tata, Infosys, Wipro, HCL, and Capgemini from the Permanent Labor Certification Program,” Daugherty wrote.
“They undercut American workers. THEY FAFO’D,” he added.
Daugherty described the action as “MASSIVE” and argued that the affected companies had relied on foreign labor programs for years.
“A flurry of companies, including some of the biggest outsourcing giants on the planet. Tata, Infosys, Wipro, and HCL have been H1B pipelines for YEARS,” he wrote.
“Without PERM, they can’t sponsor foreign workers for green cards. The path to keep them here for good is SHUT!”
He credited Vance, White House adviser Stephen Miller and D’Esposito with implementing the administration’s labor priorities.
“Vance, Stephen Miller, and IG D’Esposito are delivering exactly what Trump promised in 2024!” Daugherty wrote. “HIRE AMERICAN, IT IS THAT SIMPLE.”
While the suspension prevents the companies from advancing PERM labor certifications during the restriction, it does not necessarily eliminate every possible legal pathway to permanent residency for their foreign employees.
Some workers may qualify for immigration categories that do not require PERM certification, while others could potentially seek sponsorship through different employers.
Those distinctions will become important as affected employees and companies assess the practical implications of the Labor Department’s decision.
Microsoft and Adobe did not immediately provide substantive public responses to the allegations when contacted by news organizations following the announcement.
Other affected companies also had not publicly detailed how they intended to respond to the restrictions or whether they would pursue administrative or judicial remedies.
The Labor Department has not published a comprehensive breakdown of alleged violations associated with each company, nor has it established a public timetable for completing the investigations.
Those details could influence whether the suspensions remain in effect for an extended period or are modified following additional reviews.
For American technology professionals, the administration is presenting the decision as an effort to increase access to positions that might otherwise be filled through employment-based immigration programs.
Whether the restrictions result in additional domestic hiring will depend on how the affected companies respond, whether they expand recruitment of U.S. workers and how changes to permanent labor certification influence broader staffing decisions.
The suspension could also lead employers to restructure hiring arrangements, relocate certain operations or seek different immigration pathways, outcomes that remain uncertain.
The immediate change is that eight major technology and outsourcing companies can no longer use the Labor Department’s PERM process to advance new or pending labor certifications under the announced restrictions.
The decision gives the administration additional leverage over corporate immigration practices while increasing scrutiny of employment arrangements involving foreign technology workers.
As federal investigators examine the companies’ recruitment histories and immigration filings, the Labor Department’s next steps will determine whether the restrictions lead to further enforcement actions, negotiated compliance measures or legal challenges.
For now, the Trump administration has made one of its strongest interventions yet in the employment-based immigration system, placing major technology employers on notice that continued access to foreign labor programs will face heightened scrutiny over their treatment of American workers.
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