US Vice President JD Vance has accused Microsoft of misusing the H-1B visa programme to replace American employees with lower-paid foreign workers, describing some skilled migrants brought in through outsourcing firms as “indentured servants”. The Trump administration has suspended Microsoft and several other technology companies from a federal programme used by employers to sponsor foreign workers for permanent residency, citing allegations of fraud.

Vance alleged that companies were exploiting the system to reduce labour costs while laying off American employees. He argued that the H-1B programme, designed to help employers recruit skilled foreign professionals, had become vulnerable to misuse that could undermine wages and employment opportunities for US workers.

“If you are working as an H-1B visa in the United States of America, you’re earning $20,000 less than an American citizen hired in the same position. If you were brought in by one of these foreign outsourcing firms, you’re making $48,000 less than an American citizen in a similar position,” Vance said.

He further alleged that businesses were benefiting financially by bringing in foreign workers while cutting domestic jobs.

“You bring in indentured servants from outside the country, you lay off American workers and, if you’re a corporation, you make a ton of money by undercutting the wages of American workers, replacing them with people who frankly shouldn’t be in the United States of America to begin with,” the Vice President said.

Vance Cites Microsoft’s Layoffs And Visa Applications

Vance singled out Microsoft, accusing the technology company of making extensive use of the H-1B system while reducing its American workforce. He pointed to workforce cuts in 2025, alleging that Microsoft laid off 6,000 American employees after certifying that it could not find qualified US workers for the positions.

According to Vance, Microsoft was also approved for more than 6,000 H-1B visas and filed 3,682 applications for permanent labour certification, known as PERM. He alleged that nearly 1,000 of those applications were for positions corresponding to jobs held by American workers who had been laid off.

The allegations have intensified scrutiny of the hiring practices of technology companies that rely on international talent. Vance maintained that the visa system was intended to address shortages of qualified workers, rather than provide employers with a way to reduce payroll costs by replacing American employees.

Several Technology Companies Face Suspension

US Labour Secretary Keith Sonderling said the action extended beyond Microsoft. Other companies suspended from the programme include Cognizant, Infosys, Tata, Wipro, HCL Technologies, Capgemini and Adobe.

The Department of Labour’s action prevents the affected companies from submitting new permanent labour certification applications and halts the processing of pending applications under the programme, according to reports.

The administration has also launched investigations into nine universities, including Harvard, Yale and Stanford, over allegations that international students were brought in through visa arrangements in ways that undercut American wages. Labour Department Inspector General Anthony D’Esposito said subpoenas had already been issued.

The measures form part of the Trump administration’s broader campaign to investigate what it considers the misuse of immigration programmes intended to facilitate the recruitment of skilled foreign workers and international students.

How H-1B Visas And Green Cards Differ

The H-1B visa allows eligible skilled foreign professionals to live and work temporarily in the United States. A green card, by contrast, grants permanent resident status. An H-1B visa does not automatically lead to permanent residency, although workers may pursue an employment-based green card while continuing to work in the country.

For many employment-based green card applications, the process begins with PERM labour certification. Employers must demonstrate that there are not enough qualified, willing and available American workers for the role and that employing a foreign worker will not adversely affect the wages and working conditions of similarly employed US workers.

Once the Department of Labour approves the PERM application, the employer can generally proceed with an I-140 immigrant petition. The worker may then apply for permanent residency when an immigrant visa becomes available and the other eligibility requirements are met.

The suspensions place renewed attention on the distinction between temporary work visas and employment-based routes to permanent residency. They also raise questions about how employers should demonstrate that recruiting foreign professionals is justified while they are reducing their domestic workforce.

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