Microsoft Under Investigation After Laying Off 6,000 US Workers Amid Foreign Visa Controversy
Microsoft is facing renewed scrutiny in the United States after the Trump administration accused the technology giant of potentially abusing immigration programmes designed to help employers recruit skilled foreign workers. The controversy centres on the company's decision to lay off approximately 6,000 American employees in 2025 while continuing to submit applications under the H-1B visa programme and sponsor foreign workers for permanent residency.
On October 8, 2026, US Vice President JD Vance announced that Microsoft would be suspended from a federal programme used by employers to sponsor eligible foreign workers for green cards. The administration said the move was intended to protect American workers and address suspected abuses of employment-based immigration systems. The Department of Labor said it would stop accepting new applications involving the affected companies and suspend the processing of pending applications.
Vance pointed to Microsoft's workforce reductions in 2025 alongside its immigration filings, arguing that the figures raised questions about whether American employees were being displaced by foreign workers. According to figures cited by the administration, Microsoft laid off around 6,000 US workers while benefiting from approximately 6,300 H-1B visa approvals and nearly 3,000 green cards.
The figures have fuelled debate over whether companies should be allowed to reduce their domestic workforce while continuing to recruit internationally. However, the number of visa approvals alone does not establish that foreign workers were hired to fill the same positions vacated by employees who were laid off. The available public information does not demonstrate a direct, position-by-position replacement of the affected American workers.
Microsoft has disputed the suggestion that its visa applications demonstrate a systematic effort to replace American employees. The company said approximately 80 per cent of its roughly 6,000 H-1B applications in the relevant fiscal year involved extensions or changes in the immigration status of existing employees, rather than new hires. It added that the remaining applications involved people already legally present in the United States and represented about one per cent of its US workforce.
The distinction is important because H-1B applications can cover existing employees extending their authorised stay, as well as eligible workers changing employers or immigration status. Consequently, the number of applications or approvals does not necessarily represent the number of newly recruited foreign workers. Nor does it establish that those workers took over jobs previously held by laid-off Americans.
The federal action against Microsoft is part of a broader crackdown on the use of employment-based immigration programmes. The administration also announced restrictions affecting Adobe and several information technology services companies, including Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL and Capgemini. Officials cited concerns about possible systemic abuse and active investigations involving certain companies.
The suspension concerns access to a labour-certification process associated with employment-based permanent residency. It does not amount to a blanket prohibition on Microsoft employing foreign workers through the H-1B programme. Nevertheless, the decision could complicate the company's efforts to sponsor eligible employees for permanent residency while the restrictions remain in place.
The dispute highlights a longstanding disagreement in the US technology sector over foreign-worker visas. Supporters argue that these programmes help companies attract specialised talent and fill positions that are difficult to staff. Critics contend that employers may use them in ways that place downward pressure on wages or disadvantage American workers.
For Microsoft, the immediate challenge is to address the government's concerns while explaining how its recruitment, restructuring and immigration practices operate. The company has said it will cooperate with the administration and provide additional information about its filings.
The outcome of the investigations could have implications beyond Microsoft, particularly for technology companies that rely on international talent. For now, allegations of worker displacement must be distinguished from proven violations, and the relationship between the layoffs and visa applications remains a central issue for investigators.
