The White House has blocked Microsoft and several other major technology companies from participating in the Permanent Labor Certification Program (PERM), a system widely used by employers to sponsor highly skilled foreign workers for permanent residency in the United States.
The move was announced by Vice President JD Vance, who accused Microsoft and a number of outsourcing and technology firms of misusing the immigration system and replacing American workers with foreign labour.
Vance targets Microsoft
Speaking at a White House event, Vance claimed Microsoft had laid off roughly 6,000 employees while filing approximately 6,800 H-1B visa applications during the same period.
He alleged this showed the company was using foreign workers to replace US staff and suppress wages.
"Our message to Microsoft is quite simple: You're a great American company, you've got to hire great American workers," Vance said.
He also criticised Adobe, Cognizant, Infosys, Tata, Wipro, HCL and Capgemini, making similar allegations about their use of foreign worker programmes.
New restrictions on PERM applications
US Labor Secretary Keith Sonderling said the government would stop processing any new or pending PERM applications from the affected companies.
He accused large corporations and some universities of becoming "visa mills" that were bringing excessive numbers of foreign workers into the country.
The H-1B visa programme, often used as a stepping stone to permanent residency through PERM, is capped at 85,000 visas annually.
Microsoft's response
Microsoft rejected the allegations.
A company spokesperson told the BBC that the vast majority of its US workforce consists of American citizens and that 80% of the H-1B filings submitted during the last fiscal year involved existing employees rather than new hires.
The company also said workers hired through the programme receive the same compensation as comparable US employees.
According to immigration advisory firm Ellis, the median salary for a Microsoft employee working under an H-1B visa is approximately $155,000.
Microsoft said it looks forward to providing additional information to the administration regarding its use of the programme.
Nadella honoured at White House
The announcement came on the same day that Microsoft chief executive Satya Nadella attended a White House ceremony to receive a National Medal of Technology and Innovation from President Donald Trump.
During the ceremony, Trump praised Nadella and described the award as "well deserved".
Other technology leaders honoured included Elon Musk, Jensen Huang, Lisa Su, Sergey Brin and Michael Dell.
Wider immigration debate
The decision marks a significant escalation in the administration's criticism of skilled-worker visa programmes.
Vance argued that foreign workers sponsored under H-1B visas have limited bargaining power because losing their jobs can jeopardise their ability to remain in the United States.
Currently, most affected workers receive a 60-day grace period after losing employment, although the administration recently proposed eliminating that provision.
The H-1B system has long been used by major US technology firms including Amazon, Google, Meta, Apple and Nvidia, though none of those companies were targeted in Thursday's announcement.
The PERM programme remains one of the primary routes through which foreign workers obtain permanent residency and eventually Green Cards in the United States.
Source: BBC News
