Published: October 11, 2026 | Category: Business | By Mahesh
The US Department of Labor has suspended eight companies from the Permanent Labor Certification programme, known as PERM, a key step toward employer-sponsored green cards [3][6]. Labor Secretary Keith Sonderling named them at a White House press conference led by Vice President JD Vance on October 8: Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCLTech and Capgemini [3][6]. Sonderling said the department will not accept new PERM applications or process pending ones involving these companies [6]. The suspension does not cancel H-1B visas that their employees already hold [3].
What PERM Is and What the Freeze Does
PERM is the Labor Department process that lets an employer start a green card application, commonly for a worker on an H-1B visa [2]. The employer must show that no suitable American worker was available, usually by advertising the job first [1][2]. With the freeze, pending applications from the eight firms stop moving and no new ones are accepted [2]. No end date has been set. Vance said it will last "as long as it needs to," and officials said it could apply to other technology companies as well [6]. Manifest Law reports that officials have not released written details or a legal basis [6].
The Government's Case
Vance said the H-1B system is rife with fraud and alleged that companies place small advertisements, treat the lack of response as proof that no American applied, then fill the job with an H-1B holder [1][3]. His main example was Microsoft, which he said laid off about 6,000 American workers last year while receiving about 6,000 H-1B approvals and filing 3,682 PERM applications [3][7]. Sonderling said the named firms had requested nearly three million foreign workers since 2009 [3]. Newsweek adds that the Labor Department says it uncovered $22 billion in visa fraud, and that Microsoft and Adobe were suspended amid multiple active federal investigations [2]. None of these allegations has been tested in court.
"You're a great American company, but you've got to hire great American workers."Vice President JD Vance, addressing Microsoft, as reported by the Associated Press, October 8, 2026 [1]
The figures are not fully consistent across reports. Newsweek cites Labor Department data showing 3,157 PERM filings from Microsoft and USCIS data showing 6,258 H-1B approvals, while Vance's figure of 3,682 filings appears in other reports [2][3][7]. The gap is unexplained in the sources.
The Other Side
Microsoft said most of its US employees are American and that it pays H-1B workers the same as others doing comparable work [2]. Channel Dive reports the company said about 80 percent of its roughly 6,000 H-1B filings last fiscal year were to extend or change the status of existing employees, not to hire new ones [7]. David Bier of the Cato Institute called the action unlawful, arguing the department cannot suspend a company it has not proven broke the rules [2]. Doug Rand, a former Department of Homeland Security official, argued that blocking green cards hurts the H-1B workers themselves, who would otherwise be freer to change jobs [2]. NumbersUSA welcomed the move but said only Congress can end the financial incentive to hire foreign workers [2].
How Indian IT Firms and Markets Responded
TCS said it will comply with any Labor Department directive, that its PERM applications were in single digits over the last two years, and that it does not expect the suspension to affect its workforce strategy or customer engagements. It also said it plans to hire 15,000 people in the US over five years [4][5]. Nasscom said Indian tech firms have reduced their H-1B reliance and expanded local US hiring [5]. The other named firms had not commented in the reports we reviewed.
Markets read the news as limited in impact. The Nifty IT index rose 3.3 percent after the opening bell on October 9, reaching 28,670.25 against a previous close of 27,736.60 [4]. TCS gained as much as 5.6 percent in the morning session and Infosys 3.2 percent, and Infosys' US-listed shares rose 1.42 percent to $10.70 [4][5]. Upstox links the rally partly to TCS's September-quarter results [4]. HST Wealth's Hariselvan Radhakrishnan said the immediate operational impact may be limited, but a longer suspension could complicate employee retention and mobility and raise localisation, recruitment and compliance costs [5].
What It Means for Indian Readers
This section is Depth Grid's own analysis. The sources do not cover these points directly. Nearly three-quarters of H-1B approvals go to workers from India, according to the Associated Press, so Indian professionals are the people most exposed to rules on this pathway [1]. Anyone at one of the eight firms with a green card application in progress should assume it is paused for now and ask their employer or immigration lawyer what happens next. The freeze stops cases at the labour certification step, which is the earliest stage, so it does not by itself change the status of an H-1B worker. Separately, the Associated Press reports that the Department of Homeland Security proposed on October 7 a $70,000 fee for international students who work under Optional Practical Training [1]. The report does not say how many Indian students would be affected, so this stays a point to watch rather than a conclusion.
What to Watch Next
Four things to follow. First, how long the suspension lasts and whether the Labor Department publishes a written basis for it [6]. Second, whether more companies are added, since officials said that is possible [6]. Third, a legal challenge, given Cato's view that the action is unlawful [2]. Fourth, how Infosys, Wipro and HCLTech address the issue in their September-quarter results and whether they comment on any effect on employees.
Sources
- Rebecca Santana and Seung Min Kim, Associated Press, via PBS NewsHour. "WATCH: Vance says Microsoft is being suspended from green card program for H-1B visa workers," October 8, 2026. pbs.org
- Newsweek. "Green Card Update: Trump Admin Blocks Tech Companies From H-1B PERM Program," October 8, 2026. newsweek.com
- The Tribune. "US suspends Indian IT firms from green-card programme," October 8, 2026. tribuneindia.com
- Upstox. "TCS, Infosys, Wipro, HCLTech: Nifty IT rallies over 3% despite US suspending eight firms from green-card programme," October 9, 2026. upstox.com
- Business Today. "Infosys, TCS, Wipro, HCL Tech shares: H-1B suspension impact, ADR reaction, what's next?" October 9, 2026. businesstoday.in
- Manifest Law. "DOL Halts PERM for 8 Tech Companies," October 8, 2026. Law-firm news summary; the Labor Department's own notice was not found. manifestlaw.com
- Channel Dive. "Trump administration cracks down on IT services outsourcing, Microsoft," October 2026. channeldive.com
Read More on Depth Grid
- Googlebook on Sale at $899: Gemini Laptop Explained
- An AI Agent That Fixes Your Laptop Instead of Just Telling You How
- OpenAI Shelved Its Next Model Over Lying. Then Shipped Agents on the Old One Anyway.
Article by Mahesh | Depth Grid
Discussion (0)
Comments are disabled for this post.