Technology and Science11 July, 20263 min read
Microsoft Cuts 1,600 Xbox Jobs After US H-1B Approvals Spark Backlash
This article is an automated aggregation of coverage from news outlets. Our editorials offer in-depth analysis curated by the NewsCord team.
Xbox layoffs cited at 1,600 to 3,200, with broader company-wide reductions reported. Approval of 2,273 H-1B visas sparked backlash over job cuts.
Xbox layoffs spark visa row
Microsoft cut 4,800 jobs company-wide on July 6, with the Xbox gaming division eliminating 1,600 jobs immediately and planning to cut a total of 3,200 roles, about 20% of the division’s headcount.
“Microsoft axed 4,800 employees on July 6, representing roughly 2.1% of its global workforce.”
The backlash intensified because, in the same year, US Citizenship and Immigration Services approved 2,273 H-1B visa applications from Microsoft, while critics framed the layoffs as replacing domestic workers with foreign talent.
Microsoft chief communications officer Frank X. Shaw pushed back on the narrative, writing, "Recent workforce changes were made to restructure the XBOX business because it is not healthy. They were not made to replace employees with foreign workers."
PC Gamer reported that Shaw said the H-1B figures being referenced were Microsoft-wide visa renewals and new hire applications, and that they were not specific to Xbox and represented a small percentage of Microsoft’s overall workforce.
In the same coverage, PC Gamer also noted that Shaw said Xbox is "the largest employer of American workers in the gaming industry" and that CEO Asha Sharma is "American born, raised, and educated."
Racist framing and denials
PC Gamer said the allegations were rooted in a Fox News story with the headline, "Fury erupts as US brand fires 1,600 employees after securing thousands of foreign worker visas," and it described Fox’s framing around Sharma’s Indian heritage.
PC Gamer quoted Shaw’s response as, "Recent workforce changes were made to restructure the Xbox business because it is not healthy. They were not made to replace employees with foreign workers."
Seattle Red reported that Rep. Riley Moore (R-W.Va.) called the arrangement indefensible, saying on X, "This is INSANE. LEGAL immigration is a major problem. These companies, especially big tech, are abusing these immigration programs to replace American workers with foreign workers,"
Seattle Red also said Microsoft pinned the layoffs on the division’s finances, with Asha Sharma writing in a memo reported by the Associated Press that, "Our business today is not healthy."
In the same dispute, Times of India said Microsoft defended Sharma as an American CEO and reiterated Shaw’s points that the H-1B figures were Microsoft-wide and that "the majority of roles impacted were not American roles."
What’s at stake next
The dispute over Xbox layoffs and H-1B approvals is tied to broader political pressure on the program, with PC Gamer saying earlier this year Trump attempted to impose a $100,000 application fee for H-1B visas, a move that was eventually overturned by courts. PC Gamer also quoted Vice President JD Vance saying, "American jobs ought to go to American workers and not foreign fraudsters, and the Department of Labor is fighting back against it." Crypto Briefing framed the controversy as a political risk layer for companies that rely on sponsored visas, noting that any regulatory crackdown on H-1B programs would force companies to either hire domestically at higher costs or accelerate automation even further.
“Earlier this year, Trump attempted to impose a $100,000 application fee for H-1B visas, although that was eventually overturned by courts.”
Times of India added that Sharma was picked to lead a task force by the US Federal Reserve, with US Federal Reserve Chairman Kevin Warsh announcing leaders of five task forces and naming Sharma to run the task force on productivity and employment. Across the coverage, the core question remains whether Microsoft’s workforce reductions and its H-1B approvals can coexist, with Crypto Briefing pointing to the 2,273 H-1B approvals alongside the 4,800 layoffs and PC Gamer emphasizing Shaw’s claim that the H-1B figures were not Xbox-specific.