In a rare move that pits the federal government against one of the nation’s most valuable technology firms, the White House announced it will not process any new or pending Permanent Labor Certification (PERM) applications from Microsoft and six other companies. The decision, announced by Labor Secretary Keith Sonderling, follows accusations from Vice President‑designate JD Vance that the firms are exploiting the H‑1B visa system to replace American workers with what he called “foreign indentured servants.”
How the H‑1B and PERM Programs Work
The H‑1B visa is a non‑immigrant work permit that allows U.S. employers to hire highly skilled foreign professionals for up to three years, with a cap of 85,000 visas per fiscal year. After an H‑B holder has worked for a U.S. employer for a period, the employer can sponsor the employee for a PERM certification – a prerequisite step toward obtaining a green card and permanent residency.
White House Action and the Accusations
During a conference, Vance claimed that Microsoft, along with firms such as Adobe, Cognizant, Infosys, Tata, Wipro, HCL and Capgemini, has been “flooding” the United States with foreign workers. He alleged that Microsoft laid off roughly 6,000 American employees while filing 6,800 H‑1B petitions in the same period, suggesting a deliberate strategy to undercut domestic wages.
Secretary Sonderling echoed these concerns, describing the companies as “visa mills” and stating that the administration will not process any new or pending PERM applications for the targeted firms. This effectively blocks the pathway that would allow H‑1B holders to transition to permanent residency.
Microsoft’s Defense
Microsoft’s spokesperson told the BBC that the “vast majority of Microsoft employees in the United States are Americans.” The company emphasized that 80 % of its H‑1B filings over the last fiscal year were for employees already on the payroll, not for new hires, and that the compensation for foreign workers matches that of comparable U.S. staff. According to Ellis, a firm that assists tech companies with visa processes, the median salary for an H‑1B worker at Microsoft is $155,000.
In addition, the spokesperson noted that the company is willing to provide the administration with further information, indicating a willingness to cooperate while contesting the characterization of its hiring practices.
Broader Implications for the Tech Industry
The decision could have ripple effects across the sector. Every major U.S. tech firm—Amazon, Google, Meta, Apple, Nvidia, among others—relies on the H‑1B program to fill skill gaps that domestic labor markets cannot meet. If the PERM pathway is blocked for Microsoft and its peers, the incentive to sponsor foreign talent may diminish, potentially tightening the talent pipeline for specialized roles.
Critics argue that the move could harm U.S. competitiveness by limiting access to global expertise. Supporters, however, contend that it protects American jobs and wages, especially in a climate of high inflation and labor shortages.
Political Context
The announcement came amid a broader push by the Trump administration to tighten immigration rules. President Donald Trump awarded a technology‑innovation medal to Microsoft CEO Satya Nadella at the same event, underscoring the paradox of celebrating innovation while curbing the workforce that fuels it.
Vance’s remarks also referenced a recent proposal to eliminate the 60‑day grace period that H‑1B workers receive after termination, a change that would force them to leave the country immediately if their employment ends.
What Comes Next?
While the White House has stopped processing new PERM applications, it has not indicated whether existing certifications will be revoked or how long the moratorium will last. Companies may seek legal challenges or negotiate new terms with the administration. Meanwhile, the Department of Labor reported that it certified more than 130,000 PERM applications across ten business categories in the last fiscal year, highlighting the scale of the program.
For workers and employers alike, the outcome will shape the balance between immigration policy and the demand for high‑skill talent in America’s tech sector.