The Trump administration's reasoning for the suspension of the Microsoft's access to green cards for its H-1B visa holders was "off base," the company's president said on Wednesday.
Speaking to Politico in Ireland, Brad Smith denied Vice President JD Vance's accusations last week that Microsoft was engaging in widespread fraud through the so-called PERM (program electronic review management) process, because the company laid off thousands of workers while also applying for green cards.
"What was presented, as Microsoft replacing 6,000 people who lost their jobs with 9,000 foreigners, was, frankly, completely off base," Smith said. "The vast majority of both the visa applications and green card applications were not for new employees but for people who had already been working at Microsoft."
Smith said many of those seeking green cards had been with Microsoft for many years, but the backlog at U.S. Citizenship and Immigration Services (USCIS) was so long that it took time.
Microsoft told Newsweek on Thursday that it had nothing to add. Newsweek also reached out to the White House for comment.
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Microsoft's PERM Suspension: What to Know
During an October 8 press conference framed around fighting visa fraud, Vance and other senior officials, including Labor Secretary Keith Sonderling and Attorney General Todd Blanche, laid out a ban on multiple tech companies being allowed to apply for permanent residency for their H-1B workers.
Vance focused on Microsoft, saying that the Trump administration supported the company but had major concerns about its PERM program usage.
"So, in the last year, Microsoft—and I want to be clear about the data here…Microsoft laid off last year 6,000 American workers," Vance said during the press conference. "At the same time, the company benefited from 6,300 H-1B visas and almost 3,000 green cards.
"In other words, if you do the math, for every worker that Microsoft laid off, they replace that worker with one and a half foreign indentured servants."
Officials said investigations were being launched into Microsoft and Adobe's involvement in the green card process, while IT companies Cognizant, Infosys, Tata, Wipro, HCL and Capgemini were also suspended.
"I think the primary impact of the administration's action will be to encourage more companies to expand their investments and hiring outside the U.S., particularly for research and development, to avoid being targeted," Stuart Anderson, executive director of the National Foundation for American Policy, told Newsweek following the announcement. "That will harm U.S. workers far more than anything alleged at the press conference.
"There was no recognition at the press conference that up to 80 percent of full-time graduate students at U.S. universities in AI-related fields, such as computer and information sciences, are international students or that 59 percent of U.S. billion-dollar startup companies have at least one immigrant founder. If companies hired no recent international students or others because they weren't born here, as appears to be the policy recommended at the press event, it is unlikely America would fare well economically or technologically.”
Microsoft's President Pushes Back
Speaking Wednesday, Smith said the public had been left with the sense the only people Microsoft hired last year were from outside the U.S.
"We hired 9,200 American workers in our last fiscal year, and that was left out of the narrative," he told Politico. "We will stand by our record, and I hope that folks at the White House might look again and look at what we think is a more accurate picture."
Smith said he had concerns about the potential impact of the Trump administration's ban on U.S. ability to attract top talent—the main reason for the H-1B visa.
On the same day Vance announced the ban, President Donald Trump honored Microsoft CEO Satya Nadella and other major tech company leaders in a ceremony celebrating the industry's leaders. Smith said it was somewhat ironic as Nadella is a former H-1B visa holder.
"We should consider the fact that when the president honored six Americans with these technology and science medals, five of the six had come to the United States as immigrants," Smith said. "And those five individuals, if you put them and their companies together, have companies that have a market value equal to more than 25 percent of the market value of the total S&P 500."
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Trump Administration's H-1B Focus
The H-1B has perhaps become the defining visa of the Trump administration and its efforts to change the legal immigration system.
The visa, which has an initial three-year term that can be extended to six years, is intended to bring in highly skilled workers to industries including healthcare and technology, with the latter drawing the most scrutiny.
Critics have argued that employers have long abused the visa program to bring in cheaper labor, and that American workers are being pushed out, pointing to hiring and layoffs figures to back up this viewpoint, as Vance did last Thursday.
The PERM process allows those on an H-1B to switch to a green card, or legal permanent residency, giving them, and often their families, a more stable presence in the U.S.
As part of that process, companies have to prove that no Americans are able to do the job connected to the visa holder. Critics argue that this allows for loopholes, with companies posting ads in obscure places and using wording specific to the visa holder so that no one else is able to fill the position.
The Trump administration has sought to alter the H-1B while still allowing the same number of applicants, in part through a new $100,000 application fee for new applicants, and stricter rules at the end of the visa period, or if a worker loses their job, that could force some workers to depart the U.S. with little notice.
Earlier this week, the Department of Homeland Security said it would scrap automatic renewals of the visa, meaning immigration officers need to reassess applications even if nothing has changed.
The companies and the visa program's supporters have argued that the H-1B boosts U.S. innovation and, therefore, the economy, often leading to more jobs for Americans as well as foreign workers.
Anderson told Newsweek that the annual flow of H-1B holders equated to 0.05 percent of the U.S. labor force, and that the number of U.S.-born workers in all STEM-related jobs rose by more than 3 million between 2003 and 2024, with many of those workers earning more than nearly all other U.S. workers.
Smith repeated this messaging in his remarks Wednesday and said that H-1B holders were not paid any less than their American-born counterparts.
Trump has shown support for the program in the past and framed the $100,000 application fee as a way to ensure that the best and brightest were coming to the U.S. to help with American innovation.
Contact Newsweek editors on this story: Steve Mollman and Dave Siminoff.