Cognizant's green card-related filings have been put on hold in the United States, drawing attention to the IT services company and the wider Indian technology sector. US authorities have linked the move to an investigation into alleged visa fraud. At the same time, the development comes as the Trump administration continues to tighten rules around employment-based immigration and foreign workers.

The combination could create additional challenges for Indian IT companies that rely on a mix of offshore employees in India and professionals working at US client locations.

Why Cognizant's Case Matters

Cognizant gives a clear picture of how large the Indian IT industry's US operations can be. The company had around 351,600 employees worldwide at the end of 2025. Of these, about 41,600 were based in North America, while 256,900 worked in India.

Cognizant reported $21.1 billion in revenue in 2025.

The company is therefore deeply connected to both the US technology market and India's large technology workforce. Any major change in its ability to sponsor foreign employees could have implications for its hiring and retention strategies.

What Is PERM and Why Is It Important?

PERM is not a visa. Instead, it is a major stage in the US employment-based green card process for many foreign workers. Before an employer submits a PERM application, it generally needs to obtain a prevailing wage determination from the US Department of Labor.

The employer must also show that hiring a foreign worker for a permanent position will not negatively affect the wages and working conditions of similarly employed US workers. PERM can therefore become particularly important for professionals who first enter the US on temporary employment visas such as H-1B visas and later seek permanent residency.

For large IT companies, green card sponsorship can also help retain experienced employees. Workers who have spent several years in the US on temporary visas may be more inclined to remain with a company that supports their move towards permanent residency. However, the current suspension does not mean Cognizant's existing H-1B employees automatically lose their immigration status. It also does not mean that their existing green cards have been cancelled. The action specifically concerns the company's PERM filings.

Cognizant's Large H-1B Presence

Cognizant's position in the US employment-based immigration system helps explain why the development has attracted attention. US Citizenship and Immigration Services data show that Cognizant had 3,622 approved continuing-employment H-1B petitions in fiscal 2025.

The figure placed Cognizant among the major corporate users of the H-1B programme. Tata Consultancy Services had 5,293 approved petitions, while Infosys had 2,634. Separately, US Department of Labor disclosure data show that Cognizant Technology Solutions US Corp had 11,091 certified H-1B labour-condition applications in 2025.

These numbers do not indicate how many Cognizant employees are currently pursuing permanent residency. However, they highlight the importance of employment-based immigration to the staffing models of major Indian IT companies.

US Immigration Rules Are Becoming Tougher

The Cognizant development comes as the US is making broader changes to its foreign-worker programmes. In March, the Department of Labor proposed changes to the prevailing-wage system covering programmes such as H-1B and PERM.

The department said the proposed changes would strengthen the connection between wages paid to foreign workers and those paid to similarly qualified US workers. The changes are also intended to reduce the possibility of foreign workers being paid less than their US counterparts.

The administration has also proposed a $103,265 fee for new H-1B visas. This followed an earlier proposal for a $100,000 fee that was blocked by a federal judge. The proposals face legal and regulatory challenges. Nevertheless, they have created greater uncertainty for companies that depend on foreign talent. For Indian IT firms, the changing rules could make sending and retaining workers in the US more expensive.

Why Indian IT Companies Are Watching Closely

The US is one of the most important markets for India's technology industry. According to Nasscom, India's technology sector generated around $283 billion in revenue in FY2025. Technology exports accounted for approximately $224 billion.

The US market remains a major source of business for Indian technology companies. Financial services and other large sectors also continue to drive demand. However, the traditional Indian IT model is changing.

Companies no longer depend only on moving large numbers of Indian employees to the US. Instead, they increasingly use hybrid delivery models. Under these models, software development, technical support and other functions can remain in India or other offshore locations. Meanwhile, US-based teams handle client relationships, specialised work and projects that require employees to be physically present.

Companies May Increase US Hiring

Tighter immigration rules could encourage Indian IT companies to hire more workers directly in the US. This approach could reduce their dependence on work visas. However, it would also increase staffing costs because US-based employees generally cost more than offshore workers. Companies may therefore have to find a balance between immigration expenses and the cost of local hiring.

Offshore and Nearshore Centres Could Gain Importance

Another possible response is to expand offshore and nearshore operations. Companies could keep more technology work in India while expanding operations in locations such as Mexico, Canada and other countries closer to their US clients. This could allow firms to serve American customers while reducing their dependence on US immigration programmes.

However, moving work between countries is not always simple. Technology projects often involve specialised expertise, contractual obligations, data-security requirements and long-term client relationships.

AI and Automation Could Also Change the Model

Automation is another factor that could influence the industry's response. The growing use of artificial intelligence in software development and enterprise services could allow companies to complete certain tasks with fewer employees. AI-assisted development and automation may reduce the need for some workers to be physically present at US client locations.

However, technology companies are unlikely to replace large parts of their workforce overnight. Many projects still require human expertise, client interaction and specialised technical knowledge.

Offshore Model Faces Pressure, But Is Not Disappearing

The Cognizant case does not mean that India's offshore IT model is coming to an end. India's technology industry remains strongly export-focused. Its exports were estimated at $224 billion in FY2025. Cognizant itself also continues to employ a much larger workforce outside North America than within the region.

However, the situation highlights a growing challenge for Indian IT companies. The US side of the traditional offshore-onshore model is becoming more expensive and more closely scrutinised. As a result, Indian technology companies will need to make careful decisions about where their employees work.

The key question is no longer simply how many engineers a company has. It is also about how much work must be performed inside the US, how much can remain offshore, and how companies can manage immigration costs while meeting client requirements.