In an unprecedented escalation of its foreign-worker crackdown, the US Department of Labor on 8 October 2026 suspended eight predominantly Indian-origin IT services companies—Tata Consultancy Services, Infosys, Wipro, HCLTech, Cognizant, Capgemini, Microsoft and Adobe—from the Permanent Labour Certification (PERM) programme. PERM is a gateway step that allows employers to convert H-1B and other temporary staff into employment-based green-card holders. Announcing the action at the White House, Labour Secretary Keith Sonderling and Vice-President J D Vance alleged “systemic abuse” of prevailing-wage rules and fraudulent recruitment designed to exclude US workers. They cited internal audits showing the eight firms had sought almost three million foreign-worker positions since 2009, including 230,000 H-1B approvals and more than 100,000 PERM certifications. Until further notice the department “will not accept, or process, any new PERM applications from these entities”, Sonderling said. For India-headquartered outsourcers, the freeze up-ends long-term workforce-planning models that rely on moving mid-career specialists to US client sites and sponsoring them for residency. Human-resources advisers warn that projects may now have to be staffed with costlier subcontractors or local hires, pushing margins lower and delaying delivery schedules for Fortune 500 customers. Indian nationals already in the PERM pipeline with the affected employers face limbo: the government clarified that existing certifications remain valid but any pending or future filings are halted. Immigration attorneys advise H-1B holders whose six-year clock is running out to seek extensions based on approved I-140 petitions or to explore alternative sponsors. At a macro level, the move intensifies pressure on the Indian government’s ongoing diplomatic dialogue with Washington over skilled-mobility corridors. It also raises questions for multinational clients about vendor-diversification and compliance risk when engaging India-centric service providers.
