The US Halted Microsoft's Green Card Filings but Left H-1B Visas Alone

Vice President JD Vance named one company at a press conference in Washington on Oct. 8: Microsoft.

"Our message to Microsoft is: You're a great American company, but you've got to hire great American workers."

At the same event, Labor Secretary Keith Sonderling announced the halt. The department will not accept new or process pending permanent labor certification applications from Microsoft, Adobe, Cognizant, Infosys, Tata, Wipro, HCL and Capgemini.

What Was Said, and With What Tool

This is not a statement of intent but an action already taken: applications have stopped. The department has published no formal written notice; immigration law firms report the basis is 20 CFR 656.31.

That rule lets the department suspend an employer's applications for up to 180 days while a fraud investigation is under way. Processing can then resume, or the hold can be extended until court proceedings end. If willful misrepresentation is proven, a ban can last up to three years; no ban has been issued so far.

The tool's scope is narrow. PERM is the first step an employer takes to sponsor a foreign worker for permanent residency (a green card). The H-1B work visa was not suspended; current employees keep their status and work authorization.

According to Sonderling, the eight companies have received more than 230,000 H-1B approvals and more than 100,000 PERM certifications since 2009. Vance said Microsoft laid off 6,000 Americans last year while receiving 6,300 H-1B visas and nearly 3,000 green cards.

The Market Did Not See It as Binding

On Oct. 8, Infosys's US-listed shares (ADRs) fell about 3% and Microsoft slipped 1.35%. Adobe rose 3.56%. The Nasdaq fell 1.25% that day on the OpenAI report; sources do not tie Microsoft's drop to the decision alone.

The next morning in Mumbai, the Nifty IT index rose 3.13%. TCS gained 4.61%, while Infosys and HCL each rose 2.9%. The trigger was TCS's second-quarter result, released the night before, with net profit up 14.9%.

TCS said its PERM filings over the past two years were in the single digits. Some analysts see the decision not as a shock but as the formalization of a tightening already under way.

The September drop also coincided with new H-1B fees, a governance crisis at Coforge and Brent nearing $100. The gap between the two reactions does not come from the decision alone.

The market did not read this decision as revenue news. It read it as a retention cost.

Where the Cost Shows Up

Microsoft's own statement is enough to size the impact. The company filed about 6,000 H-1B applications last fiscal year; 80% were extensions or status changes for people already on staff.

The cost shows up in retention, not hiring. An H-1B lasts at most six years. Extensions past year six usually rely on a PERM case or immigrant petition (I-140) filed in time.

If the suspension runs past 180 days, workers nearing the six-year limit may lose their extension eligibility. The company then either moves them to an office abroad or loses them. Workers with an approved immigrant petition are less exposed.

The past month of the Nasdaq 100 frames how Microsoft's down day coincided with the AI selloff.

The Part That Does Not Fit the Story

Attorney General Todd Blanche said criminal cases could be brought against companies or individuals that broke the law. Vance said the goal was to change corporate behavior, not to punish, and urged Congress to reform the H-1B program.

Microsoft said it pays H-1B workers the same as others doing comparable work and that the vast majority of its US employees are Americans. Adobe did not comment.

What It Means for Investors

• The market did not price the decision as revenue risk for Microsoft and Adobe; in Indian IT stocks, TCS's result outweighed it.
• The impact falls on retaining workers near the six-year limit, not on hiring; costs could rise at firms running US projects, such as Cognizant, Infosys and Wipro.
• The threshold to watch is 180 days: an indictment in that window extends the hold until courts finish, and a ban could run up to three years.
• The one risk that would break the thesis: Congress changing the H-1B itself, which unlike PERM would cut the hiring flow directly.

Sources: Fox Business, TechCrunch (citing Reuters) and The Week on the Oct. 8 press conference; the text of 20 CFR 656.31 (Cornell LII); the Ellis immigration law firm's Oct. 8 analysis; Business Standard on the Nifty IT index on Oct. 9; share moves from Kotak Neo, StreetInsider and Invezz. The 656.31 basis has not been confirmed by a formal notice; Vance's figures are his own claims.