The US Department of Labor has suspended Microsoft, Adobe, Cognizant, Tata Consultancy Services, Infosys, Wipro, HCL and Capgemini from the programme that lets American employers sponsor foreign workers for employment-based permanent residency. Vice President JD Vance and Labor Secretary Keith Sonderling announced the action on October 8, 2026, calling it a crackdown on alleged fraud and misuse of the H-1B specialty occupation visa and J-1 exchange visitor programmes. PERM, the Department of Labor's Permanent Labour Certification programme, is the first step most employers take when sponsoring a worker for an employment-based green card. Under the suspension, the eight named employers cannot submit new PERM applications and their pending cases will not be processed. Existing H-1B visas, approved I-140 immigrant petitions and previously granted green cards are not automatically revoked, but the freeze leaves foreign tech workers and the companies that employ them in a holding pattern with no fixed end date.
- Announcement date
- October 8, 2026
- Suspended employers
- Microsoft, Adobe, Cognizant, TCS, Infosys, Wipro, HCL, Capgemini
- Program affected
- PERM labour certification, the first stage of employer-sponsored green card filings
- Existing status
- Current H-1B visas, approved I-140 petitions and granted green cards are not automatically revoked
- Government framing
- Alleged fraud, misuse of H-1B and J-1 programmes, and displacement of US workers
Why the eight employers were singled out
Officials framed the action as the first major use of an employer-level sanction in the PERM programme, one that goes beyond the case-by-case audits, supervised recruitment and individual denials that have dominated enforcement for years. Sonderling said the eight companies had collectively sought close to three million foreign workers since 2009, received more than 230,000 H-1B approvals and obtained over 100,000 permanent labour certifications.
The administration argued that some of those filings rested on weak domestic job advertising and on certifications that no qualified American worker was available, even as the same employers were running layoffs in related roles. Officials said the suspensions would remain in place until the named employers change their hiring practices, and that the Department of Labor and the White House have the tools to extend them indefinitely.
The move is part of a coordinated enforcement push that also includes a new visa fraud strike team announced by the Department of Labor Inspector General and reported ongoing prosecutions. Nine American universities, including Harvard, Yale and Stanford, are now facing immigration investigations of their own. According to the TaxGuru analysis of the announcement, the broader signal is that attestations signed by HR and business leaders on labour certification forms can now carry both corporate and individual exposure.
Microsoft, layoffs and the 80 percent defence
Vance pointed directly at Microsoft, citing 6,000 US worker layoffs in 2025 alongside more than 6,000 H-1B approvals and 3,682 PERM applications. Of those, he said, nearly 1,000 PERM cases involved positions overlapping with the layoffs, a pattern the administration argues points to displacement of American workers.
Microsoft has pushed back on that characterisation. The company has said that roughly 80 percent of the H-1B applications it filed in the preceding fiscal year concerned employees already working inside the United States on existing visas, rather than new hires from abroad, and that the remaining 20 percent filled specialised roles that the company says it could not fill domestically. Microsoft and Adobe are also reported to be the subject of multiple active federal investigations.
For the six IT services companies caught up in the order, the picture is different. Cognizant, TCS, Infosys, Wipro, HCL and Capgemini are the dominant sponsors of Indian tech professionals in the United States, and the green card backlog for Indian nationals already runs several years. Industry body Nasscom has said it is studying the order and its implications for Indian employees, while companies are expected to weigh immigration compliance, employee retention, recruitment costs and securities disclosure obligations as they assess the impact.
What it means for H-1B workers and 2027 hiring
For foreign tech workers already in the United States, the suspension creates uncertainty rather than an automatic loss of status. Existing H-1B visas remain valid, and approved I-140 petitions and granted green cards are not retroactively revoked. The practical pain falls on workers approaching the six-year H-1B cap, who often rely on a pending or approved labour certification to extend their status or move to a different visa. With PERM processing frozen, those pathways narrow.
Employers that sponsor at scale now face workforce continuity, retention and business risk at once. According to Newland Chase, an immigration consultancy that analysed the October 8 announcement, public data, including announced layoffs, state WARN notices and published LCA and PERM disclosure files, will increasingly be used as a targeting tool. Any employer that has reduced headcount while continuing to sponsor foreign nationals in the same or related occupations presents a comparable profile, regardless of intent.
The consultancy expects 2027 to bring broader use of employer-level sanctions, more PERM audits and supervised recruitment for employers with recent layoffs, systematic matching of layoff data against sponsorship filings, continued cost and wage pressure on the H-1B programme, and closer scrutiny of third-party staffing and IT services arrangements. For the eight employers on the order, the immediate question is how long the freeze lasts and what concrete changes in hiring the Department of Labor will demand before processing resumes.
Primary source
Check the original source
Office of Foreign Labor Certification (OFLC) — PERM programme page, U.S. Department of Labor is the source to consult for the underlying data, statement, ruling or live context.