Fury erupts as Xbox cuts 1,600 jobs amid H-1B visa row
Microsoft's Xbox division cut 1,600 jobs immediately while the company was approved for 2,273 H-1B foreign-worker visas this year, igniting online fury that U.S. roles are being traded for cheaper overseas labor. Xbox CEO Asha Sharma blamed weak margins and ordered a division-wide reset, even as studio layoffs hit id Software and Bethesda hard.
Key Takeaways
- Xbox eliminated 1,600 roles as part of a broader Microsoft round cutting 4,800 workers company-wide.
- USCIS data shows Microsoft was approved for 2,273 H-1B visas in 2026, fueling backlash on social media.
- Asha Sharma called Xbox's business "not healthy," citing margins far below comparable platform rivals.
- id Software lost 136 workers; Bethesda president Jill Braff said the publisher must pivot to its strongest franchises.
- Microsoft plans roughly 1,600 additional Xbox job cuts across the current fiscal year.
Why Did Xbox Fire 1,600 Employees?
Microsoft's dominant gaming console division is absorbing a major workforce reduction. The company said it will lay off 4,800 people in total, with 1,600 coming from Xbox, according to Fox News.
In an internal memo cited by The Associated Press, Asha Sharma told staff that Xbox's business "is not healthy" and that the unit is operating at margins three to ten times lower than comparable platform and publishing businesses. Sharma, who leads the gaming brand, framed the cuts as part of a strategy to "reset" Xbox and stabilize its finances.
How Do H-1B Visas Factor Into the Backlash?
While Xbox trimmed its headcount, Microsoft was approved this year to hire 2,273 employer-sponsored workers under the H-1B visa program, based on U.S. Citizenship and Immigration Services data reported by Fox News. Microsoft ranks as the sixth-largest beneficiary of those visas, with additional applications still pending.
Furious critics on social media accused the company of firing American workers to replace them with foreign labor at lower cost. Some posts even linked Sharma's heritage to the layoffs, though Fox News noted she was born in Wisconsin. The story lands amid wider debate over whether major U.S. tech employers are reshaping domestic workforces while expanding high-skilled visa hiring — a tension also tracked in our Fintech & Crypto Alerts coverage.
Which Game Studios Were Hit by the Layoffs?
The Xbox cuts extend well beyond corporate staff. A Texas WARN notice confirmed 136 workers were laid off at id Software, according to Game Developer, with reports suggesting roughly half the studio's team was affected.
Bethesda was also hit hard. In a staff email reported by IGN, president Jill Braff wrote that Bethesda must "change course" and focus on its strongest franchises rather than independent studio-by-studio planning. Employees were either told they were cut or face an uncertain future, IGN reported.
What Happens Next for Xbox Under Asha Sharma?
Sharma's reset is not a one-day event. Microsoft said roughly 1,600 additional roles will be eliminated across the fiscal year on top of the immediate 1,600 cuts, per IGN's reporting on the broader Xbox restructuring.
Braff told Bethesda staff the publisher will align talent and resources around franchise roadmaps to return to sustainable growth. For workers, regulators, and gamers watching Asha Sharma's turnaround plan, the overlap between deep domestic layoffs and thousands of approved H-1B slots ensures the controversy is unlikely to fade quickly.