Microsoft CEO Satya Nadella has written that his story could only have happened in the United States. On Oct. 8, the Trump administration moved to block his company from sponsoring its own foreign-born employees along the path he once followed.

Vice President JD Vance announced that day that the administration is suspending Microsoft from the Labor Department's Permanent Labor Certification Programhttps://www.dol.gov/agencies/eta/foreign-labor/programs/permanent), known as PERM, short for Program Electronic Review Management—typically the first step when an employer sponsors a foreign worker for a green card. Adobe and six IT services firms—Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies, and Capgemini—were suspended at the same time.

Hours later, President Donald Trump presented Nadella with the National Medal of Technology and Innovation, one of the country's highest honors for innovation.

What the suspension actually does

The Labor Department said it will not accept new PERM applications from the eight companies and will not process those already in the pipeline.

The action does not affect H-1B visas, the temporary work permits overseen by U.S. Citizenship and Immigration Services. PERM comes later in the process: to use it, an employer must advertise a position and demonstrate that no qualified, available U.S. worker can fill it before sponsoring a foreign employee for permanent residency. Most PERM applicants are already working in the United States on H-1Bs. In practice, employees at the eight companies can continue working on H-1B status, but the employer-sponsored route to permanent residency is paused for as long as the suspension remains in place.

Microsoft is the program's largest user. The Labor Department ruled on 3,161 of the company's applications in the fiscal year that ended in September 2025, more than for any other employer, according to a GeekWire analysis.

Asked how long the suspension would last, Vance said it would "last as long as it needs to," adding that the administration has "a number of tools to suspend it indefinitely."

Doug Rand, a former senior advisor at U.S. Citizenship and Immigration Services in the Biden administration, called the move "incoherent," telling the Associated Press that a green card frees a worker from depending on an employer for immigration status.

Vance singles out Microsoft

"So if the H-1B visa is how the people get into the country, the PERM program is how they stay in the United States to begin with," Vance said at a White House news conference. "Now there has been no company in the United States, unfortunately, that has abused the system more than Microsoft."

"Microsoft laid off last year 6,000 American workers," he said. "At the same time, the company benefited from 6,300 H-1B visas and almost 3,000 green cards." He added: "In other words, if you do the math, for every worker that Microsoft laid off, they replaced that worker with one and a half foreign indentured servants."

Vance also criticized the H-1B program as a whole. "The H-1B visa program is meant to allow companies to bring in really the best of the best from outside the United States of America for positions that are completely impossible to fill with American workers," he said. "Unfortunately, the program has become rife with fraud over the last several years, probably the last several decades."

The White House has not provided evidence of fraud by Microsoft, the Seattle Times reported.

Federal data complicates that framing. Microsoft received 6,258 H-1B approvals in fiscal 2025, ranking third behind Amazon (19,178) and Meta (6,294), neither of which was suspended, CNBC reported based on U.S. Citizenship and Immigration Services data. About two-thirds of Microsoft's approvals went to people already working at the company.

Vance acknowledged the awkward timing. "Microsoft is a great American company, and we have a great relationship with them," he said, while adding that the administration would "deny them the ability to apply for these permanent residencies until they show that they are going to get serious about putting American workers first."

Microsoft pushes back

In a [statement published on official blog, Microsoft said: "We believe in the strength and talent of the American workforce. That is why the vast majority of Microsoft employees in the United States are Americans. We look forward to providing the Administration with additional information."

"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 company said. "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 company also rejected the suggestion that its visa holders are underpaid. "Microsoft only files H-1B petitions for those who meet the rigorous standards of this visa category," it said. "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 did not directly address the PERM suspension. Neither the administration nor the company has offered a timeline for what comes next.

Nadella's own path from H-1B to CEO

Nadella was born in Hyderabad, India, and came to the United States in 1988 to study computer science, earning a master's degree from the University of Wisconsin–Milwaukee in 1990. He worked at Sun Microsystems before joining Microsoft in 1992 and later earned an MBA from the University of Chicago. He has served as chief executive since 2014.

His route to citizenship was not a straight line. In his 2017 memoir, Hit Refresh, Nadella recounts marrying his wife, Anu, in India in December 1992, while he was a permanent resident. Her visa application was rejected because she was married to a green card holder, and the wait could have stretched on for years.

So in June 1994, Nadella went to the U.S. embassy in New Delhi and gave up his green card, reverting to an H-1B status so his wife could join him right away, as GeekWire recounted. He later regained permanent residency and became a U.S. citizen.

The PERM program did not exist at the time; it took effect in 2005, replacing an older labor-certification process. But the route—H-1B, employer sponsorship, green card, citizenship—is the one many of Microsoft's foreign-born employees are on today.

Nadella has not publicly commented on the suspension. He did thank Trump on X for the medal, writing that he was "humbled to stand alongside so many giants of American innovation."

A medal, hours later

At the Golden Age of American Innovation Summit, held at the U.S. Institute of Peace, Trump called Nadella "a key figure in the transformation of Microsoft, revolutionizing the company and empowering businesses, students, and consumers from all over the world with some of the most capable software ever built or ever even conceived."

Nadella shared the technology medal with Michael Dell of Dell Technologies. Trump also awarded the National Medal of Science to Elon Musk, Sergey Brin, Jensen Huang, and Lisa Su.

Of the six honorees, only Dell was born in the United States. Musk was born in South Africa, Brin in the Soviet Union, Huang and Su in Taiwan, and Nadella in India.

This story was originally featured on Fortune.com.