The Trump administration has decided to halt new and pending Permanent Labor Certification Program (PERM) applications from Microsoft and seven other tech firms amid allegations of displacing American workers. On October 8, 2026, Vice President JD Vance accused Microsoft of exploiting the H-1B visa system as a backdoor for permanent U.S. residency for foreign workers, claiming the company replaces laid-off American employees with foreign laborers. Other companies named include Adobe, Cognizant, Capgemini, HCL, Infosys, Tata, and Wipro, with Microsoft singled out as the worst offender.

The PERM program, which enables employers to sponsor foreign workers for permanent residency when qualified U.S. workers are unavailable, has been under scrutiny. The H-1B visa, capped generally at 85,000 new visas annually, allows U.S. companies to hire foreign professionals for specialty occupations. Vance highlighted that Microsoft’s simultaneous layoffs of around 6,000 workers and filing for 6,800 H-1B visas suggests the company displaces American talent while using foreign workers who face stringent visa conditions, effectively describing them as “indentured servants.”

Microsoft responded by denying that it chiefly replaces American employees with foreign workers. The company noted its 200,000-strong workforce is predominantly American, and 80% of its recent H-1B visa filings concerned existing employees rather than new hires from abroad. Microsoft emphasized that only about 1% of its U.S. staff are new arrivals through this program and asserted that compensation for international employees is on par with U.S. workers in similar roles.

Other major tech companies like Amazon, Google, Meta, Apple, and Nvidia also utilize the PERM and H-1B programs to employ foreign professionals. In the last fiscal year, over 130,000 PERM applications were certified across various industries, reflecting the broad use of these immigration pathways in the U.S. labor market. Microsoft said it is willing to provide further information to the government as reviews continue, underscoring the ongoing tension between immigration policies and tech industry labor practices.