Washington: The Trump administration's decision to suspend Microsoft, Adobe and six major IT services companies, including Infosys, Tata Consultancy Services (TCS), Wipro, HCL Technologies and Cognizant, from the US green card programme could complicate talent retention, recruitment and workforce planning, although an immediate disruption to their operations is not expected.

The US Department of Labour announced on October 8 that it would stop accepting new applications and processing pending applications under the Permanent Labour Certification Programme (PERM) involving the companies, citing multiple active federal investigations. 

The administration has alleged misuse of employment-based immigration programmes, including practices that it says disadvantage American workers. The allegations have not been established as findings of wrongdoing against every company named.

The suspension targets a mechanism that companies use to sponsor eligible foreign employees for permanent residency, rather than the H-1B visa programme itself. However, because the route from temporary work status to a green card is an important part of long-term workforce planning, the restrictions could affect how technology companies attract, retain and deploy skilled professionals in the US.

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Recruitment and talent retention could face pressure

For technology companies, employer-sponsored permanent residency can be an important factor in attracting foreign professionals, particularly those who are considering a long-term career in the US.

The suspension could make affected firms less attractive to candidates who want a clearer route to permanent residency. Employees already working in the US may also reconsider their career plans if their green card applications are delayed indefinitely or their employers cannot initiate new PERM cases.

Reuters reported that immigration experts had warned that restricting the path to permanent residency could discourage skilled workers from moving to the US or prompt some existing workers to leave. That could complicate recruitment for companies that rely on international talent to fill specialised technology roles.

The impact, however, will vary by company and employee. Workers whose applications depend on the PERM process are more directly exposed than those whose immigration arrangements do not require this particular route.

Could US operations and project delivery be affected?

The restrictions could force companies to reassess staffing plans for US clients, particularly where projects depend on specialised skills and employees who have been working in the country for several years.

Companies may need to review their immigration cases, consider alternative staffing arrangements and strengthen recruitment from the US labour market. If the restrictions persist, uncertainty over the availability of long-term work authorisation could also influence decisions on where to recruit and locate certain functions.

However, the suspension does not automatically cancel existing green cards or revoke valid H-1B visas. Employees are not automatically required to stop working because their employer has been suspended from PERM. This means the immediate impact is more likely to involve immigration processing, future hiring and workforce planning than an automatic shutdown of ongoing projects.

Indian IT companies may have some room to adapt

The suspension comes as Indian IT services companies have already reduced their dependence on H-1B visas in response to policy changes and rising costs in the US.

According to Bloomberg, the companies have increasingly adjusted their workforce strategies amid political scrutiny of their use of foreign-worker visas. Nasscom, the industry body representing Indian technology companies, has also said that many firms have significantly reduced their reliance on H-1B visas.

Greater local recruitment could help companies manage some of the pressure. However, hiring US-based professionals may not immediately resolve shortages in specialised roles or replace the experience of employees already familiar with client systems and projects.

The suspension's longer-term impact will depend on how long the restrictions remain in place, the outcome of the federal investigations and whether the companies can use alternative lawful routes to sponsor eligible employees.

Companies face greater compliance scrutiny

The action also increases pressure on the affected companies to demonstrate that their recruitment and immigration practices comply with US labour requirements.

Under the PERM process, employers generally have to establish that there are not enough qualified and available US workers for a position and that employing a foreign worker will not adversely affect the wages and working conditions of similarly employed American workers. The process is an employer-led step in many employment-based green card applications.

The investigations could prompt companies to review recruitment records, wage documentation and the processes used to sponsor foreign employees. Any prolonged suspension could add uncertainty to workforce planning and increase the importance of compliance oversight.

The US Labour Department has not established a public end date for the suspensions in the reporting available so far, leaving companies uncertain about when they might resume filing or processing affected applications.

Tech firms face an uneven playing field

The suspension does not cover every major technology company. Reuters reported that Meta, Amazon and Alphabet's Google were not included in the announced action and remained able to participate in the PERM programme at the time of publication.

That difference could matter when skilled foreign professionals compare employers, particularly if the ability to pursue permanent residency influences their choice of workplace. Companies that retain access to the programme may have an advantage in attracting candidates who prioritise a long-term US future.

The market response has been mixed. Bloomberg reported that Microsoft shares fell more than 1.3% during Thursday's New York trading, while Cognizant shares recovered from earlier losses and rose more than 5%. Infosys American depositary receipts also turned positive after initial declines, while Wipro was down less than 1%. The varied movements suggest that investors were not responding uniformly to the announcement.