• Vice President JD Vance announced the suspension of Microsoft (MSFT)'s access to the PERM program, delivering a blunt message: "You've got to hire American workers."
  • The move escalates the administration's scrutiny of employers that lay off U.S. staff while sponsoring foreign employees for green cards.
  • Microsoft has not responded publicly, and the scope of the suspension—whether it affects new filings, pending applications, or both—remains unclear.

The Trump administration has suspended Microsoft's participation in the PERM labor certification program, according to Vice President JD Vance, marking a significant escalation in its push to restrict employment-based immigration at major technology firms.

"The message to Microsoft is you've got to hire American workers," Vance said, according to a statement released Tuesday. The announcement, which could disrupt the company's ability to sponsor foreign employees for permanent residency, caught immigration attorneys and corporate counsel off guard.

PERM, or Program Electronic Review Management, requires the Department of Labor to certify that no qualified U.S. workers are available for a given job before an employer can petition for an immigrant visa on behalf of a foreign employee. A suspension would effectively freeze Microsoft's green-card sponsorship pipeline.

A Blunt Instrument

Details of the suspension remain scarce. It is unclear whether the action applies only to new PERM filings, pending applications, or Microsoft's subsidiaries. The company, headquartered in Redmond, Washington, declined to comment. A Department of Labor spokesperson did not respond to requests for comment.

The move follows a broader pattern. The administration has intensified scrutiny of employers that conduct layoffs while sponsoring foreign workers, arguing such practices displace American labor. Vance said in September that officials were examining companies' layoff histories to prevent misuse of employment-based visas. A presidential directive in September required greater scrutiny of H-1B reviews for potential displacement of U.S. workers.

Microsoft, like its peers, has leaned heavily on skilled foreign labor. In July 2025, the company said roughly 78% of its H-1B filings were extensions for existing employees, not new hires. Yet it has also cut jobs aggressively: in July, it announced approximately 4,800 layoffs, about 2.1% of its workforce, as part of a restructuring that included an Xbox overhaul and plans to divest up to five gaming studios.

The juxtaposition of layoffs and visa sponsorship has drawn political fire. Vance criticized Microsoft's layoffs alongside its visa use in July 2025. The company responded at the time that job eliminations were unrelated to its visa program and that visa holders were among those laid off.

Business as Usual, Mostly

Microsoft's financial performance remains robust. For fiscal 2026, ended June 30, the company reported revenue of $331.8 billion, up 18%, operating income of $155.2 billion, up 21%, and GAAP net income of $133.7 billion, up 31%. Diluted earnings per share rose 32% to $17.95. Fourth-quarter revenue grew 18% to $90 billion, driven by Azure cloud services, which grew 43% and surpassed $100 billion in annual revenue.

The profit picture is not without caveats. Excluding gains from its OpenAI investment, net income growth was 22%, compared with 31% on a GAAP basis. The fourth quarter included a $3.2 billion gain from an Anthropic investment.

Capital expenditures are surging. Microsoft reported $115.9 billion in property and equipment additions for fiscal 2026, up from $64.6 billion the prior year, as it races to build AI infrastructure. The company's workforce exceeds 200,000 globally.

The PERM Distinction

Immigration lawyers stress that a PERM suspension is not equivalent to revoking existing work authorizations. PERM is a prerequisite for an employer-sponsored green card, not a work permit. H-1B status, which allows foreign professionals to work in the U.S. for up to six years, is unaffected directly by a PERM freeze.

"A company-specific PERM hold disrupts permanent-residency sponsorship, not day-to-day work authorization," said one immigration attorney familiar with the matter, who requested anonymity to speak candidly. "But it does create enormous uncertainty for employees and their families."

Still, the suspension could have cascading effects. Delayed green-card processing may prompt foreign employees to seek opportunities elsewhere, particularly in countries with more predictable immigration regimes. Former DHS official Adam Klein told Newsweek that the alternative to an H-1B worker may sometimes be a job located abroad, rather than a U.S. replacement.

Microsoft has previously warned that attracting and retaining talented employees is a business risk. In its latest annual filing, the company cited immigration policy as a factor that could affect its workforce.

Wider Crackdown

The Microsoft action is part of a broader enforcement push. The administration has reportedly taken similar steps against Cognizant (CTSH) and Cloudera, though details of those actions differ and should not be conflated with Microsoft's situation. Sources disagree on the precise program affected at Cloudera.

Vance acknowledged limits on what the executive branch can accomplish without congressional action. PERM's worker-protection test has been in place since 2005, requiring employers to demonstrate that hiring a foreign worker will not adversely affect U.S. workers' wages and working conditions.

The key legal question is what alleged conduct or investigative authority justifies a Microsoft-specific suspension. The administration has not provided a written order or explained its legal basis.

Immigration attorneys also report H-1B extension delays affecting Microsoft, Cognizant, and Infosys (INFY), though the cause of those delays is not confirmed and should not be attributed to the PERM suspension.

What's Next

Microsoft is scheduled to report fiscal 2027 first-quarter results on October 28. Management may face questions about the suspension's impact on hiring and retention, though the company has not promised to address the issue.

For now, the situation remains fluid. The absence of a formal government notice leaves the scope and duration of the suspension uncertain. Microsoft has not said whether it will challenge the action. Employees awaiting green-card sponsorship face a period of limbo.

A spokesperson for the Vice President's office did not respond to a request for additional comment by press time.

Correction: An earlier version of this article misspelled the name of former DHS official Adam Klein.