Summary: The United States has announced the suspension of several major technology companies, including Infosys, Tata Consultancy Services (TCS), Wipro, HCL, Cognizant, Microsoft, Adobe and Capgemini, from its employment-based permanent labour certification programme, commonly known as PERM. US Vice President JD Vance announced action against Microsoft on 8 October 2026, while US Secretary of Labor Keith Sonderling identified additional technology companies facing similar restrictions. The administration has linked the measures to allegations of immigration programme abuse, the displacement of American workers and concerns over employment practices involving foreign professionals. The development could have significant consequences for Indian IT companies and employees seeking employment-based permanent residency in the United States. However, suspension of PERM participation should not be confused with cancellation of existing H-1B visas or automatic rejection of all pending green card applications. The precise consequences depend on the scope of the individual government orders and the stage of each employee’s immigration process. For Indian IT companies, the immediate concerns include workforce planning, employee retention, regulatory compliance, potential litigation, recruitment costs and disclosures to investors. Importantly, the allegations remain allegations, and the reported administrative actions should not be interpreted as final judicial findings of fraud against the companies concerned.
- 1. What Has the US Government Announced?
- 2. What Is the PERM Green Card Programme?
- 3. Why Is the US Alleging Visa Fraud and Programme Abuse?
- 4. How Does PERM Suspension Differ From H-1B Visa Cancellation?
- 5. Impact on Indian Employees Waiting for Green Cards
- Employees whose PERM applications have not been filed
- Employees with pending PERM applications
- Employees with approved PERM certifications
- Employees with approved I-140 petitions
- Employees holding H-1B visas
- 6. Potential Financial Impact on TCS, Infosys, Wipro and HCL
- 7. Accounting and SEBI Disclosure Implications for Indian Listed IT Companies
- Ind AS 37: Provisions and contingent liabilities
- Ind AS 36: Impairment assessment
- SEBI LODR Regulations
- 8. Why the US Action Matters Beyond Indian IT Companies
- 9. What Should Affected Companies and Employees Do?
- 10. Conclusion
1. What Has the US Government Announced?
On 8 October 2026, the Trump administration announced a significant expansion of its enforcement action against technology companies participating in employment-based immigration programmes.
US Vice President JD Vance announced that Microsoft was being suspended from the programme through which employers seek permanent labour certification for foreign workers. The administration alleged that American workers were being displaced while companies continued to rely on foreign labour.
US Secretary of Labor Keith Sonderling subsequently identified other major technology companies facing suspension, including:
-
Tata group technology operations, reported as TCS
-
Infosys
-
Wipro
-
HCL
-
Cognizant
-
Capgemini
-
Adobe
Microsoft was separately identified in the Vice President’s announcement.
Reuters reported these developments on 8 October 2026. The announcements represent a significant escalation in the administration’s scrutiny of technology-sector employment and immigration practices.
2. What Is the PERM Green Card Programme?
PERM stands for Program Electronic Review Management. It is the administrative system used for permanent labour certification applications submitted to the US Department of Labor.
Under Section 212(a)(5)(A) of the Immigration and Nationality Act, employment-based immigration in specified categories generally requires labour certification establishing that qualified, willing and available US workers cannot be found for the position and that employing the foreign worker will not adversely affect the wages and working conditions of similarly employed US workers.
The regulatory framework is principally contained in 20 CFR Part 656.
The typical employment-based green card process involves three stages:
| Stage | Process | Responsible authority |
|---|---|---|
| 1 | Permanent labour certification, where required | US Department of Labor |
| 2 | Immigrant petition, generally Form I-140 | USCIS |
| 3 | Adjustment of status or immigrant visa processing, subject to eligibility and visa availability | USCIS / Department of State |
PERM certification is generally required for EB-2 and EB-3 cases unless an exemption applies, such as a qualifying National Interest Waiver.
Consequently, suspension of an employer’s PERM participation can interrupt a crucial step in sponsoring employees for permanent residency.
However, PERM is not itself a green card, an H-1B visa or permission to remain in the United States.
3. Why Is the US Alleging Visa Fraud and Programme Abuse?
The administration’s stated concerns focus on alleged misuse of employment-based immigration programmes and the protection of American workers.
The reported allegations involve the possibility that some employers have relied on foreign workers while reducing domestic employment or have failed to comply with the requirements governing recruitment and employment-based immigration.
The administration has also criticised practices it believes suppress American wages or create excessive dependence on temporary foreign labour.
These issues require careful legal separation.
A company employing a substantial number of H-1B workers does not, by that fact alone, commit immigration fraud. Similarly, workforce reductions occurring alongside foreign recruitment do not automatically prove a violation of PERM regulations.
Establishing an actual violation would require examination of the applicable statutory and regulatory requirements, recruitment records, employer representations, wage information and other relevant evidence.
The specific allegations, evidence and procedural findings against each newly named company have not been fully established by the reporting reviewed for this article.
Therefore, the suspension announcements must not be treated as a final determination that Infosys, TCS, Wipro, HCL or the other named companies engaged in visa fraud.
4. How Does PERM Suspension Differ From H-1B Visa Cancellation?
The distinction is particularly important for Indian professionals working in the United States.
| Particulars | PERM suspension | H-1B visa cancellation |
|---|---|---|
| Nature | Restriction affecting permanent labour certification | Action affecting temporary work visa or immigration status |
| Main authority | Department of Labor | USCIS / Department of State, as applicable |
| Primary impact | Employment-based green card sponsorship | Temporary employment or travel authorisation |
| Existing employment | Not automatically terminated | Depends on the particular action and status |
| Pending green card cases | May be affected depending on their stage and the suspension order | Requires separate examination |
| Existing H-1B status | Not automatically cancelled | May be affected by a separate lawful decision |
The US Department of Labor’s published PERM guidance confirms that permanent labour certification and subsequent immigration authorisation are distinct stages.
Accordingly, reports suggesting that all Indian employees of the affected companies have lost their US work authorisation would be incorrect.
5. Impact on Indian Employees Waiting for Green Cards
Indian technology professionals may face considerable uncertainty because employment-based permanent residency often involves lengthy processing and visa availability delays.
The impact depends on the stage reached by each employee.
Employees whose PERM applications have not been filed
These employees may face the most immediate difficulty if their sponsoring employer is prevented from submitting new labour certification applications.
A delay could affect their ability to secure a priority date and progress towards permanent residency.
Employees with pending PERM applications
The treatment of applications already submitted requires examination of the relevant suspension order.
It cannot be assumed that every pending application has been cancelled, rejected or frozen.
Employees with approved PERM certifications
An approved labour certification is a separate procedural milestone. Its continued validity and use for an I-140 petition must be evaluated under the applicable rules and any specific government action.
Employees with approved I-140 petitions
An existing I-140 approval is not automatically revoked merely because the sponsoring employer faces a PERM suspension.
However, the employee’s immigration position may depend on continuing eligibility, the validity of the underlying petition, priority-date retention rules and other circumstances.
Employees holding H-1B visas
Existing H-1B status is governed by separate immigration provisions. PERM suspension does not itself mean that an employee must immediately leave the United States.
Employees approaching visa-expiry dates should nevertheless obtain individual immigration advice, particularly where their eligibility for extensions depends on the progress of employment-based immigration proceedings.
6. Potential Financial Impact on TCS, Infosys, Wipro and HCL
The development raises business and financial risks for Indian IT service providers with substantial US operations.
However, the extent of any financial impact cannot presently be quantified reliably without company-specific information.
Potential areas of exposure
| Area | Possible consequence |
|---|---|
| Employee retention | Skilled workers may seek alternative employers offering immigration sponsorship |
| Recruitment expenses | Greater reliance on local hiring and replacement recruitment |
| Operating margins | Higher personnel and compliance expenditure could reduce margins |
| Client delivery | Difficulty retaining specialised personnel on long-term US assignments |
| Legal expenditure | Investigation, representation and potential litigation costs |
| Working capital | Potential cash-flow pressure from higher operating expenditure |
| Business strategy | Increased reliance on offshore delivery and locally recruited personnel |
These are potential commercial consequences, not established financial losses.
The restrictions may also accelerate changes already underway in the Indian IT industry’s delivery model, including increased local hiring, offshore execution and automation.
Nevertheless, local recruitment may not fully substitute for employees possessing specialised technical expertise or client-specific experience.
7. Accounting and SEBI Disclosure Implications for Indian Listed IT Companies
For Indian listed entities, the developments require assessment under applicable accounting standards and securities regulations.
Ind AS 37: Provisions and contingent liabilities
Where a company faces an investigation or potential financial exposure, management should examine whether the recognition requirements under Ind AS 37 are satisfied.
A provision generally requires a present obligation arising from a past event, probable outflow of resources and a reliable estimate.
The existence of an investigation or allegation does not automatically justify recognising a provision.
Where an obligation is possible, or an outflow is not probable, contingent liability disclosure may be appropriate, subject to the standard’s requirements.
Ind AS 36: Impairment assessment
If regulatory restrictions materially affect expected cash flows from particular business operations, management may need to assess whether impairment indicators exist under Ind AS 36.
An impairment loss cannot be presumed merely because a company’s share price declines following an adverse announcement.
SEBI LODR Regulations
Under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Schedule III, listed companies must evaluate whether a regulatory action, investigation or related development triggers a mandatory disclosure obligation.
The applicable disclosure requirement depends on the nature of the event, the legal entity concerned, materiality criteria and relevant Schedule III provisions.
Companies should also examine whether the development affects financial results, material risks or previously communicated business expectations.
A media report alone does not establish that every Indian listed company named must make an identical stock-exchange disclosure. The actual regulatory action and its applicability to the relevant entity must be determined.
8. Why the US Action Matters Beyond Indian IT Companies
The latest announcement also includes major American technology companies.
Microsoft and Adobe have been identified alongside Indian-origin IT services companies, while Capgemini, a global technology services group, has also been named.
This indicates that the administration’s enforcement initiative is not confined to Indian companies.
The broader issue concerns the US government’s approach to employment-based immigration, recruitment of foreign professionals and protection of domestic labour markets.
The administration’s position is that immigration programmes must not be used to disadvantage American workers.
Technology employers, however, depend on international recruitment to meet specialised skill requirements. Restrictions that are not carefully implemented may create workforce shortages, additional compliance costs and uncertainty for employees who have followed established immigration procedures.
The competing objectives of domestic worker protection and access to global talent will remain central to the policy debate.
9. What Should Affected Companies and Employees Do?
For employers, the immediate priority should be to establish the exact legal scope of the suspension rather than rely solely on media headlines.
Companies should identify the US legal entities covered, obtain the relevant administrative orders, review outstanding PERM applications and assess whether the action affects other immigration programmes.
Internal compliance teams should also review recruitment records, prevailing wage determinations, employee documentation and representations made in immigration filings.
For employees, the principal concern is the status of their individual applications.
Those awaiting PERM certification, I-140 approval or an H-1B extension should obtain clarification from their employer’s immigration counsel before making decisions about employment changes, international travel or immigration filings.
Where necessary, companies should evaluate available administrative remedies, reconsideration procedures or judicial challenges based on the specific action taken.
10. Conclusion
The US decision to suspend major technology companies, including Infosys, TCS, Wipro, HCL and Cognizant, from the PERM programme represents a significant development for the Indian IT industry and its workforce in the United States.
The immediate consequences are likely to be felt in employment-based permanent residency sponsorship, employee retention and immigration compliance rather than through automatic cancellation of existing H-1B visas.
For Indian IT companies, the longer-term impact will depend on the duration and scope of the restrictions, the outcome of investigations, the availability of legal remedies and the ability to adapt recruitment and delivery models.
Most importantly, allegations of visa fraud must be distinguished from proven violations. The public announcements do not establish a final finding of wrongdoing against every company identified.
Until the individual suspension orders and supporting regulatory details are available, claims concerning the exact duration, financial impact and effect on existing applications should be treated cautiously.
*****
Disclaimer: This article is based on publicly available news reports, official regulatory information and developments reported as of 8 October 2026. Allegations of visa fraud or immigration programme abuse against the companies mentioned are not established findings of wrongdoing unless confirmed by competent authorities or courts. The scope, duration and legal consequences of any reported suspension are subject to the relevant official orders and subsequent developments. The article is intended solely for general information and does not constitute legal, immigration, investment or professional advice. Readers should independently verify the latest regulatory position and seek appropriate professional guidance before taking any action. TaxGuru assumes no responsibility or liability for any loss, damage or consequences arising from reliance on this information.
