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US Vice President JD Vance accused Microsoft of abusing the H-1B visa system, calling foreign workers brought in by outsourcing firms "indentured servants". The Trump administration suspended Microsoft and several other companies from a programme linked to employment-based green card sponsorship.
JD Vance accuses Microsoft of replacing American workers with H-1B hires ( Photo- Reuters)
US Vice President JD Vance has accused Microsoft of exploiting the H-1B visa programme to replace American workers with lower-paid foreign employees, using the phrase “indentured servants” to describe skilled workers brought into the country by outsourcing firms. The Trump administration has suspended Microsoft from a programme that allows employers to sponsor foreign workers for US permanent residency, amid allegations of fraud.
“If you are working as an H-1B visa in the United States of America, you’re earning $20,000 less than an American citizen hired in the same position. If you were brought in by one of these foreign outsourcing firms, you’re making $48,000 less than an American citizen in a similar position,” Vance said.
Vice President JD Vance breaks down the data: "If you are working as an H-1B visa in the United States of America, you’re earning $20,000 less than an American citizen hired in the same position. If you were brought in by one of these foreign outsourcing firms, you’re making $48,000 less than an American citizen in a similar position. So I’m sure that everybody here understands the game that is being played. You bring in indentured servants from outside the country, you lay off American workers and, if you’re a corporation, you make a ton of money by under cutting the wages of American workers, replacing them with people who frankly shouldn’t be in the United States of America to begin with."— Vice President JD Vance (@VP) October 8, 2026
He alleged that companies were using the system to cut labour costs while laying off American employees. “You bring in indentured servants from outside the country, you lay off American workers and, if you’re a corporation, you make a ton of money by undercutting the wages of American workers, replacing them with people who frankly shouldn’t be in the United States of America to begin with,” the Vice President said.
VANCE CITES MICROSOFT LAYOFFS
Vance singled out Microsoft, alleging that the technology giant had abused the H-1B system more than any other company in the US. He pointed to the company's workforce reductions in 2025, saying Microsoft laid off 6,000 American workers after certifying that it could not find qualified US employees for the positions.
At the same time, according to Vance, Microsoft was approved for more than 6,000 H-1B visas and filed 3,682 applications for permanent labour certification, known as PERM. Nearly 1,000 of those applications were reportedly for positions matching jobs held by American workers who had been laid off.
The allegations have placed fresh scrutiny on the employment practices of major technology companies that rely on foreign talent. Vance argued that the programme, originally intended to help employers recruit highly skilled workers for jobs that could not be filled by Americans, had become vulnerable to fraud and misuse.
MORE TECH FIRMS FACE ACTION
US Labour Secretary Keith Sonderling said Microsoft was not the only major technology company facing action. He announced the suspension of several other companies from the programme, including Cognizant, Infosys, Tata, Wipro, HCO, Capgemini and Adobe.
Sonderling also announced investigations into nine universities, including Harvard, Yale and Stanford, over allegations that they brought in international students to undercut American wages. Labour Department Inspector General Anthony D'Esposito said subpoenas had already been served.
The actions form part of the Trump administration's broader effort to crack down on what it describes as the misuse of immigration programmes intended to bring skilled foreign workers and international students to the US.
HOW H-1B WORKERS GET GREEN CARDS
The H-1B visa allows skilled foreign workers to live and work temporarily in the US, while a green card grants permanent resident status. Holding an H-1B visa does not automatically qualify someone for a green card, but many workers pursue employment-based permanent residency while continuing to work in the country.
For many employment-based green card applications, the process begins with PERM labour certification. Employers must demonstrate that there are not enough qualified, willing and available American workers for the position and that hiring a foreign worker will not adversely affect the wages and working conditions of similarly employed US workers.
After the Department of Labour approves the PERM application, the employer can proceed with an I-140 immigrant petition. The worker can then apply for permanent residency when an immigrant visa becomes available and other eligibility requirements are met.
The latest action puts the spotlight on the distinction between temporary work visas and employment-based immigration pathways, as the Trump administration intensifies its scrutiny of employers that recruit foreign workers while reducing their American workforce.
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