Indian IT stocks lost about Rs 55,000 crore in combined market value on Wednesday after the US Department of Labour suspended Cognizant’s filings under the Permanent Labour Certification programme, or PERM, reviving concerns over scrutiny of foreign-worker employment and alleged visa fraud.
Infosys led the decline, falling more than 3%. Tech Mahindra, HCL Technologies and Persistent Systems dropped about 3% each, while TCS, Mphasis, Wipro and LTIMindtree declined around 2%, according to the report. The suspension directly involved Cognizant, but the market reaction extended across major Indian technology companies.
Anthony D’Esposito, inspector general at the US Department of Labour, announced the action in a social media post. “Cognizant’s PERM filings are suspended,” he said, adding that federal authorities were investigating alleged fraud and possible harm to American workers. D’Esposito said the inquiry was being conducted with Labour Department officials and the White House anti-fraud task force.
The inspector general did not disclose the specific allegations against Cognizant, the number of applications affected or how long the suspension would remain in force. The material released by the inspector general also did not identify criminal charges against Cognizant or include a response from the company. PERM filings by Cloudera were suspended separately, according to another announcement by D’Esposito.
PERM certification is a key step for employers seeking to sponsor foreign workers for permanent employment and employment-based green cards in the United States. Under the programme, the Labour Department must certify that qualified US workers are unavailable for a position and that hiring a foreign worker will not adversely affect the wages or working conditions of similarly employed American workers.
The PERM process is separate from the H-1B programme, which allows eligible US employers to hire foreign professionals temporarily for speciality occupations. The suspension of PERM filings does not by itself establish that a company’s H-1B petitions have also been suspended.
The action came a day after Cognizant announced plans to expand its US workforce. The company said it would hire 1,500 US college graduates and increase its Frontier Certified Engineer and Frontier Business Operator workforce to 15,000 people. Chief Executive Officer Ravi Kumar S said the company was hiring American graduates, creating new job categories for the artificial intelligence era and supporting a national coalition focused on the transition of US workers.
Cognizant also said it had joined RAISE US, a bipartisan coalition focused on helping American workers transition into the artificial intelligence economy. Its Synapse programme has trained more than one million people and aims to reach two million by 2030.
Cognizant is headquartered in Teaneck, New Jersey, and is listed on Nasdaq under the ticker CTSH. The company was founded in Chennai in 1994 and retains a major workforce and operational presence in India, linking the US labour action to the employment and business interests of India’s technology sector.
Coforge shares fell about 9%, although that decline followed a separate development: the resignation of chairman Om Prakash Bhatt after an audit. The Labour Department’s next steps in the Cognizant investigation, including any clarification of the allegations, the applications affected and the duration of the suspension, have not been disclosed.
