The Trump administration is suspending the process of new and pending Permanent Labor Certification Program (PERM) applications from Microsoft and seven other technology companies, claiming they are displacing American workers and abusing the system.

During a press conference Thursday, Oct. 8, 2026, Vice President JD Vance accused Microsoft of abusing the H-1B visa program and its use as a pathway to permanent U.S. residency for foreign workers, the BBC reports.

Vance also criticized Adobe, Cognizant, Capgemini, HCL, Infosys, Tata, and Wipro but said “no company in the U.S. has abused this system more than Microsoft.”

Vance said, per The Associated Press, “They’ll put an advertisement in a small-town newspaper. They’ll go out there and say that ‘We have advertised for a position with our company, and nobody is responding to it.’ And they will use that lack of response to then go and replace American workers with what is effectively foreign indentured servants.”

What Is The PERM Program At The Center Of The Tech Controversy?

The PERM program allows employers to sponsor eligible foreign workers for permanent U.S. residency, often as part of the process of obtaining an employment-based Green Card. The program is generally intended for positions where employers cannot find qualified, available U.S. workers under applicable labor certification requirements, according to the outlet.

The H-1B program allows U.S. employers to hire eligible foreign professionals for specialty occupations. The annual cap is generally 85,000 new H-1B visas, per BBC. Certain employers, including qualifying universities and affiliated nonprofit organizations, are exempt from the cap.

However, Vance alleged that Microsoft has used foreign workers to replace American employees and suppress wages. Vance cited the company’s reported layoffs of approximately 6,000 workers alongside 6,800 H-1B visa applications filed during the same period.

“Our message to Microsoft is quite simple: You’re a great American company, you’ve got to hire great American workers. You cannot lay off American workers and then replace them with foreign indentured servants,” Vance said, according to BBC.

Vance said he used the term “indentured servants” because foreign workers may “have to leave” the country if they lose the jobs sponsoring their visas, per the outlet. Generally, H-1B workers who lose their employment may have a discretionary grace period of up to 60 days, or until the end of their authorized validity period, whichever comes first, to seek another employer or take other qualifying action.

Microsoft disputed the suggestion that it uses the program primarily to replace American workers. The company reportedly employs more than 200,000 people worldwide, with the majority being Americans, the outlet noted.

A company spokeswoman told BBC 80% of its H-1B filings during the previous fiscal year involved employees already working at Microsoft rather than new hires.

Microsoft said in a statement, AP reports, “These were not to hire new people. The remaining filings for new employees were for individuals already legally in the United States who decided to come work for us, and they equal only 1% of our U.S. workforce. They are not new arrivals to our country.”

The spokeswoman also told BBC that international workers hired through the program receive compensation comparable to that of U.S. workers in similar positions.

Major Tech Companies Use The PERM Program To Hire Foreign Workers

Major firms, including Amazon, Google, Meta, Apple, and Nvidia, use the H-1B program to hire foreign professionals, BBC reports. Last fiscal year, the U.S. Department of Labor certified more than 130,000 PERM applications across 10 business categories, the outlet notes.

“We look forward to providing the [Trump] Administration with additional information,” the Microsoft spokeswoman said, per BBC.