The United States has suspended several leading IT outsourcing companies from its Permanent Labor Certification (PERM) Program, a move announced by Labour Secretary Keith Sonderling. Firms impacted include Cognizant, Infosys, Tata Consultancy Services (TCS), Wipro, HCL, and Capgemini. Additionally, Microsoft and Adobe have also been suspended due to ongoing federal investigations.
Vance Alleges Widespread H-1B Visa Abuse
The suspensions follow strong accusations from US Vice President JD Vance regarding the misuse of the H-1B visa program. Vance stated that the program, intended to bring "the best of the best" foreign workers for positions impossible to fill domestically, has become "rife with fraud over the last several years, probably the last several decades."
He specifically targeted major American corporations, alleging they exploit the system to hire cheaper foreign labor and replace American employees. Vance claimed that such practices allow companies to make significant profits by undercutting American wages.
Microsoft Singled Out in Accusations
Vice President Vance highlighted Microsoft as a prime example of alleged H-1B program abuse. He asserted that Microsoft laid off 6,000 American workers in 2025, after certifying that it could not find qualified domestic employees for certain roles. Concurrently, Microsoft was reportedly approved for over 6,000 H-1B visas and submitted 3,682 PERM applications.
A significant portion of these PERM applications, nearly 1,000, were allegedly for the exact same positions from which American workers had just been laid off. Vance described this as bringing in "indentured servants from outside the country" to replace American workers.
Impact on IT Outsourcing Firms
The suspension from the PERM program could significantly affect the ability of these IT outsourcing giants to secure permanent residency for their foreign workers in the United States. The Department of Labor's action underscores a growing scrutiny over visa programs and their impact on the American labor market.