Microsoft President Brad Smith has dismissed Vice President JD Vance's allegation that the company abuses the H-1B visa programme as “completely off base”, warning that blocking skilled immigrants from obtaining green cards could damage the US technology sector for more than a generation. Smith made the remarks in an interview with Politico, published on Thursday, 16 October 2025, on the sidelines of an AI summit in Dublin.

Smith's Defence of Microsoft's Record

“Someone had failed to inform the vice president accurately about our numbers,” Smith said, pushing back on Vance's claim that Microsoft exploits the H-1B system to avoid hiring Americans at higher wages. He clarified that the “vast majority” of the company's green-card applications were for long-standing employees rather than fresh recruits, attributing the volume largely to the lengthy green-card backlog. “Unfortunately, it’s just because the green card backlog is so long,” he said.

Smith also flatly denied that Microsoft pays foreign workers less than their American counterparts. “It doesn’t matter whether you came on a visa or you’re an American worker, everybody has the same compensation system,” he said. He added that Microsoft hired more than 9,000 US-born workers last year, a fact he said had been “left out of the narrative.”

The PERM Suspension and Its Scope

The interview followed the US Labour Department's decision on 8 October to suspend permanent labour certification (PERM) filings by eight employers, including Microsoft and Indian IT majors Infosys, Tata Consultancy Services (TCS), Wipro, and HCLTech. PERM is the mandatory first step in most employer-sponsored green-card processes. Vance announced the suspension, accusing Microsoft of fraud and declaring it would “last as long as it needs to.”

Notably, no written Labour Department notice detailing the scope or duration of the suspension had been published as of 13 October, according to immigration lawyers. A department rule permits suspension of PERM processing for up to 180 days during a fraud investigation. As of that date, none of the eight companies had been formally charged.

The Irony of the Timing

Smith pointedly highlighted the timing of the suspension. It was announced on the same day that President Donald Trump awarded Microsoft CEO Satya Nadella — who himself once held an H-1B visa — the National Medal of Technology and Innovation. “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, urging policymakers to reflect on what those individuals had contributed to American prosperity.

Broader Implications for India and Global Talent

Indians constitute the largest group of H-1B holders and face the longest green-card waiting periods of any nationality. India's External Affairs Ministry said last week that the US steps “do not advance the shared ambitions of both countries,” a rare public signal of diplomatic friction over the issue.

Smith warned against “sending — intentionally or inadvertently or otherwise — signals that send the most talented next wave of AI [or] SI software engineers to other countries, rather than the United States.” In a statement released on 8 October, Microsoft disclosed that of approximately 6,000 H-1B applications filed in its last fiscal year, 80 per cent were to extend or change the status of existing employees rather than bring in new ones.

With the suspension still in place and no formal charges filed, the standoff between one of America's largest technology employers and the White House is set to intensify, with potential ripple effects for Indian IT firms and thousands of skilled workers already in the green-card queue.