US H-1B Visa Crackdown 2026: Impact on Major IT Companies

Picture an engineer who spent five years on an H-1B, quietly waiting for her employer to file for her green card. On October 8, that filing became impossible. Labor Secretary Keith Sonderling said it plainly at the White House: “We will not accept any new or process any pending permanent labor certification applications involving these companies.”

The companies are Microsoft, Adobe, and six of the biggest IT outsourcers. It’s the sharpest turn yet in the US visa crackdown that began a little over a year ago, and it lands on people who were nowhere near the podium: workers midway through a green card queue, spouses waiting on work permits, HR teams sitting on paperwork they can no longer file.

The announcement at a glance

• When: October 8, 2026
• Who: Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies, Capgemini
• What’s frozen: new and pending PERM applications at those employers
• What isn’t: existing H-1B status
• How long: up to 180 days under the rule, though Sonderling says “as long as it needs to”

Microsoft, Adobe, and Six Outsourcers, One Announcement

Vice President JD Vance and Sonderling made the announcement together. The full list: Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini.

The timing was loaded. Reuters reported that the news broke hours before President Trump was due to hand Microsoft CEO Satya Nadella the National Medal of Technology and Innovation. The administration also announced probes into nine elite universities, suggesting it sees this US visa crackdown as one part of a broader campaign against alleged fraud and lost American jobs, not a one-off.

Labor Inspector General Anthony D’Esposito said subpoenas have already gone out. Cognizant, as it happens, was ahead of the pack: its new PERM filings were reportedly halted by the inspector general in early September.

PERM in Plain English: The Step Everyone Just Got Stuck On

PERM stands for permanent labor certification. Think of it as the Labor Department’s permission slip. Before a company can sponsor someone for a green card, it has to show that hiring a foreign worker won’t drag down wages or squeeze out US workers. Once the Labor Department’s foreign labor office signs off, the employer files Form I-140 with USCIS, and only then can the worker apply for the green card itself.

For most EB-2 and EB-3 applicants, the PERM green card route is step one. No step one, no step two.

So what did the freeze actually do? It stops new and pending PERM green card filings at eight employers. It does not cancel anyone’s current H-1B status. Headlines blur that, and it matters a lot to the people affected.

The legal hook is 20 CFR 656.31(b), a Labor Department rule that lets the agency pause processing while another agency investigates an employer for possible fraud or willful misrepresentation. According to Colombo Hurd, the first suspension can run up to 180 days, after which labor can resume processing or extend the freeze until investigations and any court proceedings finish.

One caution before anyone gets carried away. The announcement cites alleged fraud and open investigations. No finding of wrongdoing has been announced.

Why Microsoft Became the Face of the Freeze

Vance singled out Microsoft, saying no company had abused the H-1B and green card pathway more. The numbers behind that, per Newsweek: USCIS data shows 6,258 H-1B approvals for Microsoft last fiscal year, and Labor Department data shows 3,157 PERM filings.

Permtrack.app, which compiles Labor Department disclosures, lists Microsoft as the largest PERM filer overall. That volume makes it an obvious target, though volume on its own proves nothing about misconduct.

The H1B Visa New Rules That Led Up to This

None of this appeared out of nowhere. Go back to September 2025, when the Labor Department launched an enforcement drive called Project Firewall and a White House proclamation added a one-time $100,000 fee on new H-1B petitions for workers hired from abroad. Workers already in the country who simply change status mostly sidestep that fee.

Then came this year’s new H-1 B visa rules. Since February 27, 2026, the random lottery has been replaced by wage-weighted selection. A Level IV offer gets four entries in the pool; an entry-level Level I offer gets one. FY2027 registration ran March 4 to 19 at $215 per entry.

Stack it up, and the pattern is clear: every rung of the ladder got costlier or more selective, and now the green card rung is under pressure too. Anyone with an H-1 B visa application in motion is playing by rules that look little like 2024’s.

For the official basics, USCIS keeps an H-1B overview, and this Vorys client alert breaks down weighted selection.

Who’s Stuck, and Who Isn’t?

The sharpest pain is for people already in line. A worker’s priority date, their place in the green card queue, usually dates to the day the PERM was filed, so a frozen case costs time. Lawyers at Ellis note that a freeze can hit H-1B deadlines and a spouse’s work permit and queue position all at once. H-1B status generally tops out at six years, and green card progress is what allows extensions beyond that, so a stalled case can quietly turn into a countdown.

Not every route is blocked, though.

That right-hand column is the one to read twice if you’re weighing another US immigration visa route. Some job-based green cards skip PERM entirely.

How Much Will Indian IT Firms Actually Feel It?

Less than the headline suggests, possibly. India’s IT industry body Nasscom said Indian tech companies in the US have significantly reduced their reliance on H-1B visas and that relatively few of their workers seek green cards through PERM.

Markets didn’t panic either. TIKR’s investor rundown found the affected stocks didn’t sell off in any uniform way on October 8, and Cognizant, whose filings were already frozen, actually rose 5.15%. TIKR notes that a single day’s close can’t isolate the freeze’s effect.

If Your Green Card Is in the Queue, Do This Now

When a US visa crackdown moves this fast, a few quiet steps are worth taking:

1. Check where you stand. Is your employer one of the eight, and is your PERM unfiled, pending, or already approved?
2. Write down your dates. Your priority date, and whether an I-140 has already been approved.
3. Ask about other routes. An immigration attorney can tell you whether EB-1A, EB-2 NIW, or another non-PERM option fits your profile.
4. Mark the calendar. The rule allows an initial suspension of up to 180 days, so that’s where the real decision point may land.

This is general information, not legal advice. Your own case may look different.

What to Watch After the 180-Day Mark

That’s the first real checkpoint. Keep an eye on whether labor resumes processing, extends the freeze, or adds more employers to the list, and on how the nine university probes develop.

For now, the safest reading of this US visa crackdown is that it’s unfinished. Each person’s case will matter more than any headline, so get your own facts straight before you make big decisions.

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