Background On 8 October, U.S. Vice President J.D. Vance and Labor Secretary Keith Sonderling announced a suspension of eight companies from the Permanent Labor Certification (PERM) programme, citing alleged misuse of the H‑1B visa system. Microsoft, along with Adobe, Tata Consultancy Services, Infosys, Wipro, HCLTech, Cognizant and Capgemini, was among those named.
Microsoft’s Response In an exclusive interview with Politico’s Decoded, Microsoft president Brad Smith dismissed the accusations as “completely off base.” He explained that the bulk of Microsoft’s green‑card applications are for employees who have been with the company for several years, not for new recruits. Smith said the high volume of applications is largely a consequence of long immigration backlogs.
Microsoft’s own data shows that it filed roughly 6,000 H‑1B petitions in the previous fiscal year, with 80 % of them being extensions or status changes for existing staff. Only about 1 % of the petitions were for workers already in the U.S. and represented a small fraction of the company’s 2023 U.S.‑born workforce, which numbered more than 9,000.
The company also highlighted that it applies the same compensation structure to American and foreign‑born employees, and that H‑1B holders receive pay equal to comparable U.S. workers.
Implications for Talent Flow Smith warned that the new restrictions could push future AI and software engineers toward other countries. He cited the example of Satya Nadella, Microsoft’s Indian‑born CEO who entered the U.S. on an H‑1B visa and later received the National Medal of Technology and Innovation from President Trump.
The suspension does not cancel existing H‑1B visas, but it limits access to the PERM process, which is a key step for many employment‑based green‑card applications. Analysts suggest that for Indian IT firms, the immediate impact may be limited because their reliance on PERM has already declined.
Industry Reactions While a White House spokesperson has not yet responded to Smith’s remarks, the broader tech community is watching closely. The policy shift could influence how U.S. firms recruit and retain international talent, especially in high‑growth areas such as artificial intelligence.
What to Watch - Any further clarification from the White House on the scope of the PERM suspension. - Potential adjustments to the H‑1B and PERM processes that could affect hiring timelines. - Reactions from other firms on the list and how they plan to navigate the new restrictions.
Microsoft’s stance underscores the delicate balance between meeting global talent demands and complying with evolving immigration regulations.