The U.S. Department of Labor suspended Microsoft, Adobe and several major Indian information technology companies from the Permanent Labor Certification program, blocking them from applying for permanent residency for employees on H-1B visas. Official data show that about 70% of H-1B beneficiaries in 2025 were born in India.
Workers and Employers
The suspensions came as U.S. Vice President JD Vance said the Trump administration wanted foreign and domestic companies to “employ American workers.” He said companies “cannot lay off American workers and then replace them with foreign indentured servants.”
Vance also criticized Microsoft, accusing it of replacing 6,000 laid-off workers with people on H-1B visas. His office didn't immediately respond to a request for comment. The source gives no company response to that accusation.
The companies affected include Cognizant, Infosys, Capgemini, Tata Consultancy Services, Wipro and HCL. The Labor Department action concerns their access to a program that allows applications for permanent residency for H-1B employees; it doesn't invalidate existing H-1B visas.
India's Ministry of External Affairs said the U.S. measures wouldn't affect the validity of existing H-1B visas or the status of visa holders and their dependents. The ministry issued that assurance to Indian citizens as the companies faced suspension from the labor certification program.
The State and the Visa System
Vance made his remarks Thursday as the Department of Labor announced the suspensions. India's ministry called his language “deeply offensive” in a government statement published Friday, objecting to what it described as terminology with “painful historical and colonial legacy connotations.”
The ministry said Indian professionals in the United States are “highly educated and skilled contributors to its economy and innovation ecosystem.” It also said: “Talent mobility adds value to both economies,” and that the suspensions “do not advance the shared ambitions of both countries.”
NASSCOM, the IT industry body, said Indian technology companies had “significantly reduced their dependence on H-1B visas” in recent years and were expanding domestic hiring for their U.S. workforces. The statement describes companies changing recruitment practices while the U.S. government restricts their access to the certification program.
Tata Consultancy Services, described as India's largest IT company, said its H-1B applications had been in “single digits” over the previous two years. It said it intended to hire another 15,000 people in the U.S. over the next five years.
Limits of the Dispute
The dispute centers on layoffs, hiring and access to the visa system. Vance's accusation links Microsoft's layoffs to H-1B hiring, while the Indian ministry emphasizes the skills and economic contributions of Indian professionals. The source reports the accusation but doesn't establish that the laid-off Microsoft workers were replaced as Vance claimed.
In June, a federal judge blocked the $100,000 H-1B visa fee that U.S. President Donald Trump imposed one year earlier. The ruling halted that fee, while the Labor Department's suspensions affect the named companies' ability to apply for permanent residency for H-1B employees. Existing visas and holders' status, India's ministry said, remain unaffected.