Well, this is a nuclear bomb directed at companies that abuse the H-1B visa system and the Permanent Labor Certification Program, which converts H-1B visa holders into permanent residents.
Nothing like this has happened before at this scale, although enforcement actions on a much smaller scale have achieved the same goal.
.@Sonderling47: "I am hereby suspending from the Permanent Labor Certification Program some of the largest IT outsourcing firms in the world — Cognizant, Infosys, Tata, Wipro, HCL, and Capgemini — and also, due to multiple active federal investigations, @USDOL is suspending Microsoft and Adobe from the program."
— Rapid Response 47 (@RapidResponse47) October 8, 2026
And what is that goal? To protect U.S. workers from abusive companies, mostly focused in the information technology world, which import cheap labor from abroad to replace perfectly capable US workers.
It's a huge, growing problem, partly driven by companies seeking cheap labor, and in a program that imports doctors, directly caused by federal subsidies that freeze American medical students out of residency programs here in the United States. As far as I know, the administration hasn't addressed the latter yet, but this move to stop H-1B visa abuse is a step in the right direction.
Microsoft came under the spotlight, though several IT outsourcing companies, including Tata, a well-known Indian company, were slammed just as hard.
The Trump administration is suspending Microsoft and some other companies from seeking permanent residency for foreign workers hired through the H-1B visa program, accusing them of taking advantage of the process so that they could replace American citizens with cheaper labor from abroad.
Vice President JD Vance said Thursday that the tech giant is one of a handful of companies to be barred indefinitely from the Labor Department’s PERM program following an investigation spearheaded by the anti-fraud task force that he chairs.
That probe determined that Microsoft laid off roughly 6,000 American workers last year, while at the same time employing 6,300 non-citizens that it had brought to the US by obtaining H-1B visas for them.
“The H-1B visa is how the people get into the United States in the first place, and then a PERM program is how those employees stay,” Vance said. “There has been no company in the United States, unfortunately, that has abused the system more than Microsoft.”
You've likely read more than a little about H-1B visa abuse, and no case is clearer than Microsoft laying off 6000 American workers and replacing them with more foreign workers. For all the talk of labor shortages requiring the importation of more workers, it's hard to deny that this was pure abuse of a system that was never intended to crush American workers.
It's supposed to bring in the Einsteins of the world, who have no American counterpart; it's not supposed to replace mid-level programmers with equivalent mid-level programmers who cost less.
Vance downplayed the administration’s decision to punish Microsoft over accusations of fraud on the same day that it hailed the company’s achievements.
“Our message to Microsoft is not that we want to harm your company, it’s that we want your company to thrive, but we want it to thrive by employing and empowering your fellow Americans,” he said. “So we’re going to continue to support Microsoft and have a great relationship with Microsoft, but we’re also going to deny them the ability to apply for these permanent residencies until they show that they are going to get serious about putting American workers first.”
The Labor Department is also indefinitely suspending software firm Adobe and several IT outsourcing firms from the PERM program, meaning that any new or pending requests for permanent residency for their workers will not be considered.
Vance did not lay out any specific steps for the companies to regain access to the process, saying only that it wanted Microsoft and others to “change their behavior, improve their behavior and actually get better.”
Companies have all sorts of ways to subvert the hiring process and claim there are no available American workers. One favorite is to post an obscure ad in a newspaper classifieds that nobody will see, then recruit foreign workers to fill positions that few or no Americans applied for.
I caught on to this when people started posting photos of such ads on X, wondering why the jobs weren't on the usual hiring boards. It turns out that this tactic fulfills the letter of the law, but subverts its purpose. I would assume that, in ongoing investigations, this would imply or prove that the companies conspired to avoid hiring Americans, since they made no good-faith effort to hire Americans. I have no idea whether that is enough to prosecute, but it is obviously enough for the administration to hit them with a regulatory nuke.
Another ZERO: United Health Services in Johnson City, New York. All 14 residents listed in its 2026 entering three-year internal medicine class attended medical school abroad. Nine trained in Pakistan. Its two one-year preliminary interns also attended schools abroad. https://t.co/fNS2ZKEBKh
— Natalie Winters (@nataliegwinters) October 1, 2026
Medical schools and hospitals are hiring a lot of foreign doctors, and Medicare actually pays for the medical education of many of them, too. The idea is to get doctors into underserved areas, but when combined with medical schools' DEI practices, an awful lot of Americans who should and would enter the medical workforce are frozen out.
Something changed at Texas Health HEB/Denton. Among its current Internal Medicine residents, graduates of Pakistani medical schools make up: PGY-3: 5 of 20 = 25% PGY-2: 3 of 19 = 16% PGY-1: 13 of 21 = 62% The newest class isn’t just more international, nearly two-thirds of the entire class attended medical school in Pakistan. Maybe this is what happens when an Abbott-appointee simultaneously serves as U.S. coordinator for an initiative of Pakistan’s Ministry of Planning.
— Nick Plumb (@PlumbNick) September 26, 2026
This is another example of a loophole in the immigration system that is upending our labor market and kicking Americans out of skilled industries in favor of foreign workers, and even worse, in some areas of the world, the credentials aren't worth the paper they are printed on because there is so much fraud.
BREAKING: 97.6% of medical residents at Rochester General Hospital are foreign medical graduates. All of them hired on H1-B/J1 visa. Only 2 Americans got hired out of 82 total residents.
— Expose H1B Fraud (@JobsNowPaper) September 26, 2026
I've been treated by several foreign doctors, and my experience has been almost universally positive. I've had two Indian doctors as specialists, one excellent and the other truly outstanding. I just had an Arab doctor do a biopsy on me and he did an excellent job. He'd been at the hospital almost 20 years, though.
But that is not the point. The point is that the system shouldn't be stacked against Americans. I have no problem supplementing American doctors when the number of available Americans is insufficient to meet demand; the problem is when foreign workers substitute for native-born Americans to save a buck.
In general, the more skilled labor doing necessary work, the better. I don't believe in the idea of a fixed pie that cannot grow, and just as AI can improve productivity by empowering skilled people to do more without making their lives worse, more doctors in places or specialties where we are short are not inherently bad.
But that's only true when the system works as it should, and it doesn't, though a cynic would say it works as intended.
If the intent is to give a healthier bottom line to a corporation that is indifferent to the negative effects its decisions have on our communities and country, then it's time to put them in their place by hitting back.
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