US Labor Department Suspends Cognizant and Cloudera Permanent Labor Certifications; India's IT Industry Fears Systemic Tightening

According to the international edition of The Hindu, US Department of Labor Inspector General Anthony D'Esposito announced this week that he has suspended the applications of IT services provider Cognizant Technology Solutions under the Program Electronic Review Management (PERM) permanent labor certification program, stating that this action is part of a coordinated effort with a White House anti-fraud task force. The Labor Department did not disclose specific allegations or the number of applications involved, nor did it confirm any criminal charges against the company.

D'Esposito posted on the X platform that "Cognizant's PERM filings are suspended," and added: "Threats to American workers will NOT be tolerated." Another company, Cloudera, which the Labor Department announced on the same day was also subject to a similar suspension, but the notification materials did not name any specific violations for either company.

PERM is a mandatory step in the employment-based green card process — the Labor Department must determine that no qualified American workers are available to fill the relevant positions, and that hiring foreign workers will not depress the wages of American workers in comparable positions. Once a company's applications are suspended, foreign tech employees currently in the United States and waiting in line for green cards will face a predicament regarding their status.

What is worth noting is that the Labor Department's action occurred the day before Cognizant's high-profile announcement of domestic hiring. On September 7, Cognizant CEO Ravi Kumar S. announced plans to hire 1,500 American university graduates and expand the company's "frontier certified engineers" and "frontier business operations" workforce to 15,000. He stated at the time: "We are hiring American graduates, standing up new American job categories for the AI era, and putting Cognizant's capital and leadership behind a national coalition built to make sure this transition works for workers."

Cognizant was founded in 1994 in Chennai, India, now headquartered in Teaneck, New Jersey, and listed on Nasdaq — this identity combination has led some industry observers to question the logic of this "targeted enforcement."

EIITREND CEO Pareekh Jain told The Hindu that the question is why Cognizant. He expressed puzzlement that a company founded by Indians, but already headquartered in the United States and listed on Nasdaq, would be the "first to be targeted." Jain believes that this choice is less a move targeting India-US relations than a signal sent to the entire IT industry, even though the US government has not explicitly said so.

Jain also warned that if the suspension continues, Cognizant employees currently in the green card queue will face "talent retention risks" and may switch to other companies; if similar actions spread to other tech companies, the entire industry will be forced to increase domestic hiring. He noted that the focus of immigration scrutiny is extending from the H-1B short-term work visa to the entire path of "work visa to green card."

Piyal Gupta, formerly of Accenture and Cognizant and now CEO of Kneuralabs, posted on LinkedIn that this matter is of great significance to the global IT industry, because PERM is the "critical link" in the employment-based green card process. He reminded the industry that an investigation should not be equated with a conclusion that Cognizant did indeed violate regulations. But he also judged that the broader industry impact will be more stringent scrutiny of wage compliance, hiring processes, and document preparation.

Gupta stated directly: "The era of treating H-1B and Green Card sponsorship simply as an HR process is changing." In other words, work visa and green card sponsorship can no longer be treated by companies as a purely human resources process, but must be regarded as a high-risk area for compliance.

The most jarring aspect of the Labor Department's action is the gap between politicized rhetoric and thin disclosure: the Inspector General defines the suspension with the most mobilizing language of "will not tolerate threats to American workers," while the executive branch has neither named any specific instances of fraud nor indicated when the suspension will be lifted. A multi-billion-dollar IT services provider that has been deeply rooted in the United States for decades has been "put on the target," yet outsiders cannot even know the most basic question of "what was found" — this kind of selective enforcement and flare-gun politics makes it difficult for cross-border tech workers not to reassess their own futures.