Vice President JD Vance and Labor Department officials announced Thursday that the Trump administration is suspending Microsoft, Adobe and several other companies from a key employment-based green-card program, accusing major technology firms and outsourcing companies of abusing the visa system at the expense of American workers.

"There has been no company in the United States, unfortunately, that has abused the system more than Microsoft," Vance said at a news conference focused on H-1B and J-1 visa fraud, noting that the administration was targeting companies it accused of using foreign workers to undercut U.S. wages and replace American employees. The H-1B program allows U.S. employers to hire foreign workers in specialty occupations, while the J-1 program covers participants in approved educational and cultural exchange programs.

Vance said Microsoft laid off 6,000 American workers last year while benefiting from 6,300 H-1B visas and nearly 3,000 green cards, calling it a "scandalous system."

"For every worker that Microsoft laid off, they replaced that worker with 1½ foreign indentured servants," Vance said.

Vance said the administration had decided to suspend Microsoft's access to the Permanent Labor Certification (PERM) program, which allows employers to sponsor foreign workers for permanent residency. Under the program, employers must certify that qualified U.S. workers are unavailable and that hiring a foreign worker will not adversely affect American wages and working conditions. The practical effect of the suspension is a freeze on both new applications and pending ones, meaning foreign employees whose green-card sponsorship runs through the affected employers now have that process on hold for as long as the measure remains in place.

"Our message to Microsoft is, you're a great American company, but you've got to hire great American workers," Vance said. "You cannot lay off American workers and then replace them with foreign indentured servants."

Microsoft responds

Microsoft issued a comprehensive statement shortly after Thursday's news conference, noting that "the vast majority of Microsoft in the United States are Americans."

"We look forward to providing the Administration with additional information," the statement read. "For example, of the approximately 6,000 H-1B visa applications we submitted in the last fiscal year, 80% were to extend or change the status of existing Microsoft employees. These were not to hire new people."

"The remaining filings for new employees were for individuals already legally in the United States who decided to come work for us, and they equal only 1% of our U.S. workforce. They are not new arrivals to our country," the statement continued.

"Microsoft only files H-1B petitions for those who meet the rigorous standards of this visa category. We pay our employees some of the highest compensation in the tech sector, and our wages are among the highest of all H-1B filings. We pay our H-1B employees the same as any other employees doing comparable work."

The statement concluded by saying the company "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."

Outsourcing firms also targeted

The Department of Labor is also suspending Adobe from the program, along with several major IT outsourcing firms — Cognizant, Infosys, Tata, Wipro, HCL and Capgemini among them — according to Labor Secretary Keith Sonderling, who cited active federal investigations. The action reaches across different parts of the technology industry, pairing two of the country's best-known software companies with major IT outsourcing firms.

"We will not accept any new or process any pending permanent labor certification applications involving these companies," he said. "Since 2009, just these companies alone have requested almost 3 million foreign workers. They've received over 230,000 H-1B visa approvals and over 100,000 permanent labor certifications."

"That's hundreds of thousands of jobs that were taken from American workers. Our historic action is the first critical step to stop the fraud and the abuse, and ensure that these programs never come at the expense of the American worker," he said. "Under President Trump's leadership and thanks to Vice President Vance and this task force, we are ending the fraud that has fueled reliance on foreign labor."

Fox Business reached out to Adobe for comment.

J-1 investigations at nine universities

Vance also announced investigations into alleged J-1 visa abuse at several universities, including Harvard, Yale, Stanford, Brown, the University of Pittsburgh, UC Davis, Caltech, Arizona State and MIT.

"I am announcing a historic investigation into the J-1 visa fraud involving nine major American universities," Labor Department Inspector General Anthony D'Esposito said. "Subpoenas have been served, investigations are underway, and nobody will be getting a free pass because their name is carved into an expensive building."

"Improperly using J-1 visa classifications to avoid employment obligations, exploit taxpayer-funded programs and undermine American workers will not be tolerated," he added.

Vance denounced what he called the "insult" of visa fraud by America's companies.

"This is a fundamental insult to the American worker and to the American way of life," Vance said. "We cannot allow visa programs that were designed to ensure that American corporations had access to the best and the brightest, to use them to undercut the wages of American workers."

Call for congressional reform

Vance urged Congress to overhaul the program and close loopholes that he said have enabled abuse.

"This is a terribly pernicious system: It's gone on for too long, and we'd all encourage, by the way, Congress to do something about it," Vance said.

"I, again, would encourage Congress to reform this program. It is very clear that it's not working the way that it should, but we have tools in the administration to make this program work better for the American people. A lot more we could do if Congress was willing to play ball," he continued. "And again, we extend an invitation to both Democrats and Republicans. If you want the H-1B visa program to stop being used to defraud the American taxpayer and to undercut the wages of American workers, get to work, and we will help you, but we're going to do everything that we can in the interim to ensure the program works as it was designed for."

Criminal cases not ruled out

When asked about targeting companies, Vance said the action was intended to change corporate behavior rather than punish individual firms. Attorney General Todd Blanche, however, warned that criminal cases could be brought against companies or individuals found to have broken U.S. law.

"Microsoft is a great American company, and we have a great relationship with them," Vance said in response to a question. "They do a lot of important things. They also laid off 6,000 American workers, while replacing them with 6,300 H-1B. And our message to Microsoft is not that we want to harm your company, it's that we want your company to thrive, but we want it to thrive by employing and empowering your fellow Americans."

With the suspensions in effect, subpoenas already served in the university probes and criminal cases still on the table, the developments to watch next are the findings of the federal investigations and whether Congress takes up the overhaul Vance requested.