Infosys plays down impact of PERM suspension
Source Entity
TNN
Major Indian IT firms like Infosys and TCS have downplayed the impact of a US government suspension of the PERM permanent residency program. Both companies cite a strategic shift toward localized hiring and reduced reliance on green cards as key buffers against these regulatory hurdles.
Regulatory Shifts and the Resilience of Indian IT Giants
Recent actions by the United States Department of Labor to suspend certain Indian IT firms from the Permanent Labor Certification (PERM) program have sparked discussions regarding the future of offshore service models. The PERM process, a vital pathway for foreign nationals to secure permanent residency (green cards) while working in the U.S., has been temporarily halted for several major players. However, industry leaders like Infosys and TCS have moved swiftly to assure stakeholders that these regulatory developments will not materially disrupt their core operations.
Strategic Pivot: The Localization Imperative
For years, the Indian IT sector has been gradually shifting away from a visa-heavy model toward a more localized workforce strategy. TCS CEO K. Krithivasan noted that green cards were never central to their long-term talent management, emphasizing that the company has already reduced its permanent residency applications to single digits. This aligns with a broader trend where companies are investing heavily in U.S.-based technology and innovation hubs to mitigate the risks associated with volatile immigration policies.
Assessing the Operational Impact
While the suspension of PERM applications creates administrative friction, the quantitative impact appears limited. Data suggests that Indian IT firms accounted for less than 2% of total PERM applications filed between October 2024 and September 2025. By maintaining a diversified workforce—where, in the case of TCS, local hires now account for 50% of the U.S. staff—the industry has built a buffer that prevents singular regulatory actions from crippling their service delivery capabilities.
Navigating a Complex Political Landscape
This move by the U.S. administration is widely viewed as part of a broader agenda to prioritize domestic labor and tighten immigration controls. The recent PERM suspension follows other restrictive measures, such as the introduction of a $100,000 fee for certain H-1B visas. These policies reflect a concerted effort to curb the reliance on foreign labor, creating an environment of persistent uncertainty for multinational corporations that have historically bridged the gap between global demand and technical talent.
Future Trends and Market Sentiment
Despite the immediate confidence expressed by executives, the long-term implications remain a point of concern for market analysts. While the current impact is muted, there is a legitimate fear that this could signal the beginning of broader work-visa restrictions. If the U.S. government expands these crackdowns to include H-1B visa programs more aggressively, the cost of operations for Indian IT firms could rise significantly, potentially compressing margins and forcing a faster, more expensive transition to U.S.-based hiring.
Conclusion
In summary, while the suspension of the PERM program presents a tactical challenge, Indian IT majors appear well-prepared to navigate the fallout. Through aggressive local hiring targets—such as TCS’s plan to recruit 15,000 additional workers in the U.S. over the next five years—and a decreased reliance on green-card-dependent talent, these firms are demonstrating a high degree of operational maturity. The sector's ability to absorb these regulatory shocks will remain a critical metric for investors and clients alike in the coming fiscal cycles.