Microsoft, Adobe and six major IT services companies face new restrictions on sponsoring foreign employees for permanent residency in the United States.
The Trump administration on Thursday suspended the companies from the federal Permanent Labor Certification Program, known as PERM, accusing them of abusing employment-based immigration rules.
The affected companies are Cognizant, Infosys, Tata Consultancy Services (TCS), Wipro, HCL Technologies and Capgemini. Labor Secretary Keith Sonderling said the Department of Labor would stop accepting new applications and processing pending applications involving the companies, according to Reuters.
PERM generally requires employers to demonstrate that hiring a foreign worker will not adversely affect the wages or working conditions of US workers. The certification is a key step in many employment-based green card applications.
Vice President JD Vance accused Microsoft of exploiting the system, citing reported layoffs of 6,000 US workers alongside thousands of H-1B approvals and green card-related filings. Microsoft has disputed the implication that those figures represent an equivalent influx of new foreign workers.
Microsoft pushes back
Microsoft disputed the suggestion that its visa filings represented a large influx of new foreign workers.
In a statement, the company said approximately 80% of the 6,000 H-1B applications it submitted in the last fiscal year were intended to extend or change the status of existing employees. The remaining applications involved people already legally in the United States who wanted to join Microsoft, representing about 1% of its US workforce. The company also said it pays H-1B employees the same as other employees doing comparable work.
TCS, meanwhile, said its PERM applications had numbered in the single digits over the previous two years and that it did not expect the suspension to affect its workforce strategy or customer engagements, Bloomberg reported.
A green card freeze is not a visa cancellation
The announcement does not automatically cancel existing H-1B visas. Instead, it blocks the affected companies from advancing new and pending PERM applications under the administration’s directive.
That distinction matters because some H-1B workers depend on employer-sponsored green card applications to extend their stay beyond the visa category’s usual six-year limit. Workers who cannot qualify for another extension or immigration status could face difficult decisions about changing employers or leaving the country, Business Insider reported.
Immigration attorneys also questioned whether the Labor Department has the legal authority to impose the suspensions in their current form, raising the possibility of court challenges.
The staffing decisions tech firms now face
For the affected companies, the immediate challenge is managing employees whose permanent residency plans depend on PERM. Employers may need to reconsider recruitment, retention and the distribution of work between US offices and overseas delivery centers.
The impact could extend beyond immigration paperwork. Bloomberg Intelligence analyst Tamlin Bason said the restrictions could encourage greater local hiring, more offshore delivery and additional staffing costs that companies may eventually pass on to customers.
For channel partners and enterprise customers, those changes could affect project staffing, delivery arrangements and contract costs, particularly where services depend on specialized employees working in the United States.
However, the impact will vary. TCS said its PERM applications had been in the single digits over the previous two years and that it did not expect the suspension to disrupt its workforce strategy or customer engagements.
The broader effects will depend on how heavily each company relies on PERM sponsorship and how long the restrictions remain in place.
What this means for workers and technology users
Foreign technology workers at the affected companies face the most immediate uncertainty, particularly those approaching H-1B time limits or relying on employment-based sponsorship for long-term residence. Their options will depend on individual immigration circumstances, not simply their employer’s name.
Workers should verify the status of their applications and consult qualified immigration attorneys before making employment or travel decisions.
For technology customers, the effects are less immediate but could emerge over time. If affected companies face tighter staffing constraints or move more work offshore, businesses relying on their IT services could encounter changes in project delivery, staffing continuity or costs.
The suspension’s duration, legal standing and impact on individual applications remain uncertain. For now, the key questions are how the affected companies will respond and whether the restrictions withstand legal scrutiny.
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