US Labor Department Halts PERM Processing for Microsoft, TCS and Six Other Firms in H-1B Probes

The order directly affects the employment-based green-card pipeline used by Indian nationals, who received roughly 70 percent of annual H-1B approvals and over 8.7 million such visas in the preceding decade. State Department records show 8.7 million non-immigrant visas issued to Indian nationals between March 2017 and February 2026. The suspension removes the first statutory step toward permanent residency for workers already inside the United States on temporary visas.

For the United States the measure narrows one channel through which firms can convert temporary visas into permanent settlement, thereby preserving domestic labor-market leverage and reducing future claims on public services. For India the same action contracts remittance flows and limits an established route for skilled nationals to obtain long-term residency. Indian IT services companies lose a predictable mechanism for retaining staff inside key client accounts.

US officials cite specific instances of workforce replacement at Microsoft; Indian officials state the action contravenes shared economic objectives and reject characterizations of visa holders as indentured. Primary records consist of the Labor Department announcement, congressional statements referencing 6,000 US layoffs paired with 6,300 new H-1B petitions, and the Indian Ministry of External Affairs protest note.

Firms named in the order must now demonstrate compliance or relocate affected roles. Indian IT services companies face immediate pressure to rebalance delivery models between US client sites and offshore delivery centers.