The White House has blocked Microsoft and several other technology companies from sponsoring skilled international workers for permanent residency through a widely used visa pathway. Vice President JD Vance announced on Thursday that he accused Microsoft and a group of other firms of fraud within the H-1B visa system, which serves as a precursor to the Permanent Labor Certification Program (PERM).
Vance characterized Microsoft, one of the United States’ most valuable corporations, as having replaced domestic employees with what he described as “foreign indentured servants.” “No company in the US has abused this system more than Microsoft,” Vance stated during a press conference alongside Secretary of Labor Keith Sonderling. Sonderling confirmed that the government would halt the processing of all new and pending PERM applications from Microsoft and seven other targeted organizations, labeling companies like Microsoft and certain universities as “visa mills” flooding the country with overseas workers.
The additional firms named in the announcement include Adobe, Cognizant, Infosys, Tata, Wipro, HCL, and Capgemini. The H-1B visa program itself is subject to an annual cap of 85,000 visas. Vance cited data indicating that Microsoft recently laid off approximately 6,000 workers while simultaneously filing 6,800 H-1B visa applications, claiming this pattern demonstrated the substitution of American labor with cheaper foreign alternatives.
A Microsoft spokeswoman responded to the allegations by emphasizing that the vast majority of the company’s US workforce consists of American citizens. She noted that 80% of the H-1B filings submitted during the last fiscal year were for existing employees rather than new hires, and insisted that international staff are compensated at parity with domestic workers. Data from Ellis, a firm that assists technology companies with overseas hiring, showed that the median salary for an H-1B worker at Microsoft was $155,000 last fiscal year.
The criticism comes despite Microsoft CEO Satya Nadella recently attending White House events, including a state dinner for Chinese President Xi Jinping and a luncheon on artificial intelligence, where he received a new technology innovation medal from President Donald Trump. Vance told reporters, “Our message to Microsoft is quite simple: You’re a great American company, you’ve got to hire great American workers. You cannot lay off American workers and then replace them with foreign indentured servants.”
Vance defended his terminology by pointing out that foreign workers on sponsored visas are often required to leave the United States if they lose their employment. Although a 60-day grace period has traditionally been granted in such cases, the US government proposed last month eliminating that discretionary window entirely.
While the use of the H-1B program is standard practice across the major US technology sector—used by companies such as Amazon, Google, Meta, Apple, and Nvidia—only the eight firms targeted by the White House faced immediate sanctions. The PERM program is designed to facilitate permanent residency for highly skilled workers whom employers cannot find domestically. In the last fiscal year, the Department of Labor certified over 130,000 PERM applications across ten business categories.
Interesting that Amazon and Google weren’t named here. Why single out Microsoft and these specific firms while ignoring the rest?
Replacing laid-off American workers with cheaper foreign labor? That really does sound like exploitation, not innovation.
This is a drastic move. Does the administration have proof of fraud, or is this purely political posturing against big tech?