The Trump administration has temporarily banned Microsoft, Adobe and several other tech companies from sponsoring workers for permanent US residency, claiming they have abused immigration programmes at the expense of American citizens.
“There has been no company in the US, unfortunately, that has abused this system more than Microsoft,” vice-president JD Vance said at a press conference on Thursday.
He claimed the H-1B visa programme for highly skilled foreign workers “has become rife with fraud” and that over-reliance on such schemes “is a fundamental insult to the American worker and to the American way of life”.
Six other IT outsourcing companies — Cognizant, Infosys, Tata, Wipro, HCL, and Capgemini — were also suspended from the Permanent Labor Certification (PERM) programme, which allows US employers to hire foreign workers on a permanent basis.
At the same event, the administration announced it had launched a fraud investigation into the use of the J-1 student visas at nine American universities: University of Pittsburgh, Yale, Harvard, Stanford, Brown, UC Davis, Caltech, Arizona State and MIT.
“Subpoenas have been served; investigations are under way and nobody will be getting a free pass because their name is carved into an expensive building,” said Department of Labor Inspector General Anthony D’Esposito.
Adobe and other named IT firms did not immediately respond to requests for comment. Microsoft said the “vast majority” of its employees in the US were Americans. “We look forward to providing the Administration with additional information,” the company added.
The announcement marks the latest move in a broad crackdown on immigration by the Trump administration. It has previously taken aim at H-1B visas, which are widely used by tech companies and specialist industries.
Last year, the White House attempted to impose a $100,000 fee on new applications, but the increase was blocked by a federal court.
In June, Judge Leo Sorokin ruled the fee amounted to an unauthorised tax, and infringed on Congress’s authority to raise funds. The Trump administration has appealed against the ruling, which is pending before a federal appeals court.
Before the fee increase, the government charged $215 to register for the H-1B visa lottery and $780 base fee more for employers sponsoring visa applicants. More than 400,000 such visas were approved last year.
In his comments on Thursday, Vance said the visas were helping companies undercut the wages of American workers. He claimed some H-1B holders were earning between $20,000 and $48,000 less than US citizens hired for similar positions.
Amazon, which is the biggest recipient of H-1B visas, was not mentioned in the press conference. But Vance singled out Microsoft, saying it “laid off last year 6,000 American workers at the same time the company benefited from 6,300 H-1B visas and almost 3,000 green cards”.
“For every worker that Microsoft laid off, they replaced that worker with one and a half foreign indentured servants,” Vance added.
Microsoft, whose shares dropped more than 1 per cent following the announcement, said the visa applications mentioned by Vance were largely “to extend or change the status” of existing employees.
“Microsoft only files H-1B petitions for those who meet the rigorous standards of this visa category. 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,” the company added.
The Trump administration is due to honour the Indian-born Microsoft chief executive Satya Nadella, who will be given the National Medal of Technology and Innovation at a separate event on Thursday, alongside South-African born Elon Musk and the Taiwanese Nvidia boss Jensen Huang.
But Vance said there was no contradiction between the two announcements.
“Our message to Microsoft is: ‘You’re a great American company, but you’ve got to hire great American workers’.”