Microsoft Cuts 4,800 Jobs Amid H-1B Visa Fraud Probe

Microsoft Corporation is eliminating 4,800 jobs, approximately 2.1% of its global workforce, as part of a major corporate restructuring. The most significant cuts affect the Xbox gaming division, where 3,200 positions—roughly 20% of the unit's staff—will be removed by June 2027. Of these, 1,600 employees were terminated immediately. Xbox CEO Asha Sharma attributed the reductions to an unhealthy business model with profit margins three to 10 times lower than competitors, citing declining player hours, unsuccessful acquisitions, and rising hardware costs.

The layoffs triggered public and political backlash after reports revealed Microsoft was approved for 2,273 H-1B foreign worker visas this year. Critics and lawmakers allege the company is replacing American workers with cheaper foreign labor. In response, Vice President JD Vance announced that the U.S. Department of Labor has launched dozens of subpoenas and investigations into H-1B visa fraud. Microsoft communications lead Frank Shaw denied these allegations, stating the H-1B figures represented company-wide renewals and not Xbox-specific hires.

Within the gaming division, the restructure involves divesting five studios and pivoting Obsidian Entertainment toward a new Fallout game. Union members under the OneBGS banner have organized "Save Our Devs" rallies for July 15 across the U.S. and Canada to protest the cuts, which affected over 440 positions at ZeniMax-owned studios. Actor Ben Starr further criticized the company, accusing Microsoft of lying about the benefits of studio consolidation.