REDMOND, Wash. — The Trump administration is suspending Microsoft from using a program that allows it to apply for green cards for workers who are in the U.S. on H-1B visas
These visas are used for filling highly skilled roles predominantly in the tech industry.
The action won’t stop Microsoft from hiring workers on H-1B visas but could make the company less competitive when trying to recruit foreign workers who want to stay in the U.S. long-term.
On Thursday, Vice President JD Vance accused Microsoft of fraud.
“You cannot lay off American workers and then replace them with foreign indentured servants,” he said.
Vance said Microsoft laid off 6,000 American employees last year but obtained 6,300 H-1B visas.
Microsoft pushed back on Vance’s claims, noting that a majority of its U.S. employees are Americans.
The company said 80% of its 6,000 H-1B visa applications last fiscal year were to extend or change the status of existing Microsoft employees.
“These were not to hire new people,” the company wrote.
Vance said most workers using these visas are being paid less than their American counterparts. Microsoft said the company pays H-1B employees “the same as any other employees doing comparable work.”
“Microsoft succeeds as a global technology leader by developing the world’s best technology workforce. We do this by strengthening this country’s talent pipeline, hiring American workers, and attracting the best talent from around the world,” the company wrote in a statement.
According to U.S. data, Microsoft ranks fifth among corporate users of H-1B visas this fiscal year. Amazon ranks first.
Economic analysts highlighted that technological hubs rely on specialized international expertise alongside local labor.
“You can draw on local talent for sure for much of it, but you also need super specialized additional help along the way,” said Mark Muro, a senior fellow at Brookings Metro.
Muro said potential policy restrictions could affect the broader technology sector, noting, “They could be serious because talent is the coin of the realm.”
“I would hazard to say no place has benefited more from this than Seattle,” he said. “Really, Seattle and Silicon Valley.”
Economists also challenged assertions that foreign workers reduce opportunities for domestic employees.
Giovanni Peri, a professor of economics at UC Davis, stated that skilled personnel spurs corporate expansion and overall local employment.
“I want to dispel is this idea that there is a fixed number of jobs and if you give them to the foreigner, the native will not have them,” Peri said. “That’s not how the economy works. Jobs are created by a firm. If the firm can grow because they can hire smart people who produce new idea, they can hire more.”
Discussing international competition for talent, Peri warned that local markets could suffer if workers move elsewhere.
“Ultimately, the local economies that lose these people will become a bit poorer; the growth will slow down,” Peri said.