Trump admin bars Microsoft and other tech companies from seeking permanent residency for foreign workers

By Adam Cancryn, CNN

(CNN) — The Trump administration is suspending Microsoft and some other companies from seeking permanent residency for foreign workers hired through the H-1B visa program, accusing them of taking advantage of the process so that they could replace American citizens with cheaper labor from abroad.

Vice President JD Vance said Thursday that the tech giant is one of a handful of companies to be barred indefinitely from the Labor Department’s PERM program following an investigation spearheaded by the anti-fraud task force that he chairs.

That probe determined that Microsoft laid off roughly 6,000 American workers last year, while at the same time employing 6,300 non-citizens that it had brought to the US by obtaining H-1B visas for them.

“The H-1B visa is how the people get into the United States in the first place, and then a PERM program is how those employees stay,” Vance said. “There has been no company in the United States, unfortunately, that has abused the system more than Microsoft.”

Vance and other top administration officials alleged that Microsoft had misrepresented its needs in applying for permanent residency for its foreign workers, arguing that the program is meant only for workers with “hyper-specialized” skill sets that can’t be easily found in the US.

Instead, they accused the company of using the program primarily to replace skilled American employees with similarly qualified immigrants who it could pay less to do the same job.

“The fraud is that they’re making representations when applying for this program that are fundamentally illegitimate and therefore ultimately illegal,” Vance said.

In a post on its website, Microsoft officials disputed Vance’s assertions, saying that 80% of the roughly 6,000 H-1B visa applications the company submitted in the last fiscal year were to extend or change the status of existing employees — not to hire new ones. The rest of its applications were for people hired by the company who were already legally in the US.

“We pay our employees some of the highest compensation in the tech sector, and our wages are among the highest of all H-1B filings,” Microsoft officials wrote. “We pay our H-1B employees the same as any other employees doing comparable work.”

The announcement also raised immediate questions about the timing of the administration’s targeting of Microsoft. In a separate ceremony on Thursday, President Donald Trump is due to award Microsoft CEO Satya Nadella the National Medal of Technology and Innovation.

The medal is the nation’s highest honor for technological achievement and is awarded to those who make “outstanding contributions to America’s economic, environmental and social well-being,” according to the US Patent and Trademark Office.

Vance downplayed the administration’s decision to punish Microsoft over accusations of fraud on the same day that it hailed the company’s achievements.

“Our message to Microsoft is not that we want to harm your company, it’s that we want your company to thrive, but we want it to thrive by employing and empowering your fellow Americans,” he said. “So we’re going to continue to support Microsoft and have a great relationship with Microsoft, but we’re also going to deny them the ability to apply for these permanent residencies until they show that they are going to get serious about putting American workers first.”

The Labor Department is also indefinitely suspending software firm Adobe and several IT outsourcing firms from the PERM program, meaning that any new or pending requests for permanent residency for their workers will not be considered.

Vance did not lay out any specific steps for the companies to regain access to the process, saying only that it wanted Microsoft and others to “change their behavior, improve their behavior and actually get better.”

The move marks the Trump administration’s latest attempt to show it’s cracking down on instances of government “fraud” ahead of the midterm elections, framing the issue as critical to ensuring Americans have fair access to job opportunities and federal benefits.

Trump officials on Thursday also announced that they planned to separately investigate several universities over allegations of that they had abused the J-1 visa program, which allows them to bring in foreign nationals as students, researchers or teachers.

Under that program, Vance said, officials believe that schools regularly employ workers from abroad as a way to undercut the salaries that they would otherwise need to pay to Americans in those positions.

The universities under scrutiny are Harvard; Yale; Stanford; Brown; the University of Pittsburgh; the University of California, Davis; California Institute of Technology; Massachusetts Institute of Technology; and Arizona State University.

This story was updated with additional information.

The-CNN-Wire
™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.