Microsoft Accused of Laying Off Thousands of XBOX Employees to Hire Foreign Workers and Reduce Labor Costs

Microsoft has come under fire over its recent restructuring of the XBOX division, a move aimed at shoring up profitability in its video game business. The initial phase in July eliminated 1,600 positions, and the company now projects that a total of 3,200 XBOX employees will be let go by the end of fiscal year 2027.

Criticism has mounted across the political spectrum and beyond, as a new and controversial detail has emerged: Microsoft is being accused of laying off XBOX staff while simultaneously turning to foreign hires as a cost-saving measure.

The timing of the layoffs has raised particular scrutiny, given that they coincided with federal authorization for the tech giant to recruit more than 2,000 foreign workers, leading to allegations that the company is cutting labor expenses at the expense of U.S. employees.

Microsoft Accused of Laying Off XBOX Employees to Hire Cheap Foreign Workers

According to a report from the New York Post, the U.S. Department of Labor granted Microsoft permission to hire 2,273 non-immigrant workers from abroad under the H-1B visa program, which enables American firms to bring in foreign talent for specialized roles.

Data released by the U.S. Citizenship and Immigration Services (USCIS) has fueled widespread indignation among American workers and the broader public. Many have accused Microsoft of replacing local staff with lower-paid foreign hires in an effort to drive down overall labor costs.

Some critics have characterized the H-1B program as “industrial-scale job theft” from U.S. citizens, pointing out that foreign nationals are being brought in precisely when mass layoffs are occurring. Microsoft, along with other major tech companies, has faced long-standing scrutiny over this practice, prompting U.S. workers to demand stricter oversight.

“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,” said Rep. Riley Moore, R-W.Va.

The data further reveals that Microsoft ranks among the program’s largest beneficiaries, with a significant number of applications originating from workers in India. Some critics have specifically targeted Asha Sharma, president of XBOX, accusing her of favoring potential recruits from that country over American employees.

Microsoft Defends Itself and Excuses Using H-1B Visa Program

US President Donald Trump has tried to curb the reach of the visa program, but without much success. Recently, an investigation into the matter was announced to prevent alleged fraud and “protect” American workers.

In response to the backlash, Microsoft has defended its position, asserting its continued support for the H-1B visa framework. The company issued a statement clarifying that many H-1B visa holders were themselves affected by the recent layoffs at both its corporate offices and XBOX, insisting that there is no covert strategy to reduce costs through foreign hiring.

“These decisions are based on business need, not visa status. H-1B employees were also impacted by job eliminations in the U.S.,” a company spokesperson said.

Adding to the controversy, Asha Sharma was subsequently appointed as an advisor to the U.S. Federal Reserve on productivity and jobs, which drew sharp criticism given the thousands of layoffs already impacting XBOX and those still expected in the months ahead.

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