Microsoft (MSFT) and Adobe (ADBE) lost access to a key step in the US green card system on Thursday, October 8. Labor Secretary Keith Sonderling announced the suspensions at a White House press conference, saying the Labor Department won’t accept new or process pending permanent labor certification (PERM) applications involving either company. Six IT outsourcers were named alongside them.
The same day, President Trump handed Microsoft CEO Satya Nadella the National Medal of Technology and Innovation. Microsoft stock closed down 1.35% at about $523, while Adobe shares rose 3.56% to about $241.
Why Washington Singled Out Microsoft
PERM is the step a company clears before sponsoring a foreign employee for a green card, usually someone already working there on an H-1B visa. The suspension does not itself revoke existing H-1B status. It blocks new and pending PERM applications at the named companies, rather than every route to permanent residency.
Vice President JD Vance said there is no company in the US “that has abused the system more than Microsoft.” He claimed Microsoft laid off 6,000 American workers last year while benefiting from 6,300 H-1B visas and almost 3,000 green cards. Asked about timing, he said the suspension will “last as long as it needs to.”
Microsoft told ABC News that the vast majority of its US employees are Americans and that it pays H-1B staff the same as others doing comparable work. In July 2025, it said 78% of its H-1B petitions over the prior year were extensions for existing employees.
How Microsoft and Adobe’s Spending Compares
PERM supports permanent employment sponsorship for both existing and prospective employees. The suspension could complicate recruitment and retention, but it does not automatically require higher pay or equity awards. R&D and stock-based compensation provide spending context, not a direct measure of the employees or costs affected.
In fiscal 2025, Microsoft spent $32.49 billion on R&D, equivalent to 11.5% of its $281.72 billion in revenue. Adobe spent $4.29 billion against $23.77 billion, or 18.0%, up from 16.1% four years earlier.
In fiscal 2025, Microsoft’s $11.97 billion in stock-based compensation equaled about 4.2% of revenue, versus Adobe’s $1.94 billion, or 8.2%. Adobe’s existing equity-compensation expense was nearly twice as large relative to revenue, but these ratios do not establish which company faces greater costs from the suspension.
Stocks Finished Mixed
The affected stocks did not show a uniform selloff on October 8, but their closing moves do not isolate the suspension’s impact. Microsoft slipped 1.35%, and Adobe gained. Cognizant (CTSH), whose PERM filings have been suspended since September 8, rose 5.15%. Infosys (INFY) and Wipro (WIT), both named in the order, barely moved.
The announcement alone does not establish a measurable earnings impact for either company this quarter. What’s new is the open-ended timeline. Adobe’s exposure was also building before the announcement: all 215 of its pending PERM cases were already listed on hold as of September 25.
The Question Microsoft and Adobe Can’t Answer Yet
Duration is one important unknown, alongside how many employees are affected and how the companies respond. A prolonged suspension could increase recruitment and retention difficulties, but its financial impact is not yet established.
My view: Adobe’s higher equity-compensation expense relative to revenue makes retention spending worth watching, but it does not prove greater exposure to this suspension. Its next earnings report could provide management commentary; a rise in stock-based compensation alone would not establish a connection to the policy.
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