US administration suspends major tech firms from green card programme

UPDATE - follow-up to US suspends 8 IT firms from permanent labour certification programme: US Labour Secretary Keith Sonderling announced the suspension of eight major technology companies from the Permanent Labour Certification Programme on Thursday. The suspended firms include Indian IT giants Infosys, Tata, Wipro, and HCL, alongside global firms with a large presence in India such as Cognizant, Capgemini, Microsoft, and Adobe.

Market Impact

The American Depositary Receipts of Infosys and Wipro dropped about 3% each in Thursday's trade following the announcement. India's $300 billion IT sector earns about 57% of its revenue from the US market. Companies have trimmed their reliance on H-1B visas over recent years through local hiring. Indians received roughly half of all new H-1B approvals last fiscal year, though new approvals for Indians fell 28% from FY24 to about 57,000.

Official Statements

US Labour Secretary Keith Sonderling stated that the administration is suspending some of the largest IT outsourcing firms in the world. Vice President JD Vance, heading the US Anti-Fraud Task Force, appeared alongside Sonderling and accused Microsoft of abusing the system. Vance stated that Microsoft laid off 6,000 American workers last year while securing 6,300 H-1B visas and nearly 3,000 green cards. Vance noted that the certification programme requires companies to advertise jobs locally to prove a shortage of American workers before applying for foreign worker green cards.

Context

The Permanent Labour Certification Programme allows companies to apply for green cards for their H-1B visa workers. The H-1B visa framework has faced ongoing scrutiny from critics who argue it undercuts local employment opportunities.