In a major setback for IT companies operations in the United States of America, the Donald Trump administration has suspended eight technology giants, including Infosys, Tata Consultancy Services (TCS), Wipro, HCL Technologies, Cognizant, Capgemini, Microsoft and Adobe, from the US Permanent Labour Certification (PERM) program. This would mean that these companies will now not be able to issue new H1B visa for employees. This announcement was made by Keith Sonderling, Labour Secretary, United States along with JD Vance, Vice President, United States on 8 October 2026.
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The US Government has alleged the misuse of the PERM program by the companies in question. Under the decision, the US Department of Labour will stop accepting new permanent labour certification applications and processing pending applications involving these companies. While announcing the decision, Sonderling stated that TCS, Infosys, Wipro, HCL Technologies, Cognizant, Capgemini, Microsoft and Adobe, had collectively requested nearly three million foreign workers since 2009, receiving more than 230,000 H1B visa approvals and over 100,000 permanent labour certifications. The administration raised concerns about suspected immigration-related fraud and the potential impact of foreign-worker hiring on American employment, while noting that the allegations do not imply misconduct by every company concerned. Vice President JD Vance also criticised Microsoft’s hiring practices, questioning the continued employment of foreign workers amid layoffs affecting American staff.
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Microsoft, however, raised a strong objection over the allegations of immigration-related fraud. “We believe in the strength and talent of the American workforce. That is why the vast majority of Microsoft employees in the United States are Americans. We look forward to providing the Administration with additional information. For example, of the approximately 6,000 H1B visa applications we submitted in the last fiscal year, 80% percent were to extend or change the status of existing Microsoft employees. These were not to hire new people. The remaining filings for new employees were for individuals already legally in the United States who decided to come work for us, and they equal only 1% of our US workforce. They are not new arrivals to our country.
Microsoft only files H1B petitions for those who meet the rigorous standards of this visa category. We pay our employees some of the highest compensation in the tech sector, and our wages are among the highest of all H1B filings. We pay our H1B employees the same as any other employees doing comparable work. Microsoft succeeds as a global technology leader by developing the world’s best technology workforce. We do this by strengthening this country’s talent pipeline, hiring American workers, and attracting the best talent from around the world,” said Microsoft in a statement.
H1B Visa Suspended for Existing Employees?
Disqualification of IT companies from the PERM program will not impact employees with existing H1B visas or Green cards. However, The PERM program is an important step that is needed for obtaining employment-based Green Cards, which allow foreign nationals to live and work permanently in the United States. Companies are required to demonstrate that no qualified American worker is available for a particular position before sponsoring a foreign employee. Disruption of this process would mean that the path to permanent residency for thousands of employee will be impacted.
NASSCOM Says Move Unlikely to Cause Major Impact
NASSCOM has issued a statement on the matter saying this move in unlikely to cause a major impact. “The US Department of Labor has today announced the temporary suspension of certain IT companies, including Indian technology companies operating in the US , from filing new applications under the Permanent Labor Certification (PERM) program. While the decision affects a specific immigration pathway, NASSCOM has consistently maintained that immigration and skilled talent mobility are two distinct issues and should not be viewed through the same lens. The H1B visa program has historically played an important role in addressing short-term skill gaps in the US and it will continue to be used to address short term talent gap. However, over a number of years, Indian technology companies have significantly reduced their dependence on H1B visas, while steadily expanding local hiring and building a strong domestic workforce in the US They work with majority of the US fortune 500 companies, enable them to innovate and grow, and generate more local jobs,” said NASSCOM.
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They further add: “Consequently, the number of employees transitioning from H1B visas to permanent residency through the PERM process is also relatively limited. Indian technology companies operate across more than 80 countries and have consistently demonstrated their commitment to complying with local laws and regulatory requirements. We are confident that they will continue to adhere to applicable regulations in the US as well.”
