Microsoft Responds to Racist Layoff Claims: Denies Replacing Workers With Foreign Employees

Microsoft has pushed back against allegations that its latest wave of layoffs was tied to foreign workers replacing American employees. The tech giant is dismissing accusations that job cuts were designed to make way for foreign workers to be hired via the H-1B visa programme.

The claims came after sweeping job cuts that affected thousands, especially at Xbox. While layoffs were initially viewed as part of a broader restructuring of Microsoft's gaming business, some critics argued Microsoft's continued use of the H-1B visa programme raised questions about its hiring practices following the layoffs.

Microsoft Pushes Back Against Online Claims

The company's latest layoffs have renewed questions about Xbox's long-term strategy, with critics arguing that years of studio closures, acquisitions, and organisational changes eventually led to a large wave of job cuts. As criticism over its recent layoffs spread online, Microsoft denied accusations about its recent layoffs, arguing that the cuts were part of a restructuring effort instead of an attempt to replace US employees with foreign ones.

Communications chief Frank Shaw addressed the claims directly on X. 'Lots of bad information out there – let's clear it up. 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,' he wrote.

The response comes after a slew of questions about the company's immigration practices in the wake of the gaming division layoffs. Shaw said the layoffs were a reflection of the health of the Xbox division's financials, not a change in the company's broader hiring philosophy.

Media Coverage Fuels Online Debate

The issue gained more traction online after Fox News reported on H-1B visa activity in the wake of the layoffs. The report mentioned the background of Xbox executive Asha Sharma, which led to a couple of heated discussions on social media.

Joining the debate was West Virginia Representative Riley Moore, who argued that technology firms had become too reliant on foreign labour through the visa system. His remarks fed into a wider conversation about immigration policy and hiring practices in the tech industry, where critics say Microsoft favours overseas talent over American workers.

Microsoft Says Layoffs Were Not Limited to the US

Shaw said that the claims linking the layoffs to Microsoft's H-1B visa program were misleading and that visa sponsorships are handled company-wide rather than within individual business units like Xbox, arguing the cuts were global rather than targeted at American workers.

Additionally, he maintained that the layoffs also affected teams in Canada and Germany, with Arkane Studios in France also caught up in the shake-up. He also rejected another claim circulating online, saying that Xbox executive Asha Sharma was born in Wisconsin despite claims suggesting otherwise.

Layoffs Reignite H-1B Discussion

The controversy also reignited broader political debate over the H-1B visa programme. President Donald Trump's administration has backed stricter immigration measures, including higher H-1B fees and increased scrutiny of the programme, arguing such policies would encourage companies to prioritise American workers.

Meanwhile, some technology companies argue that the visa system is vital for recruiting specialised talent, which underscores the growing divide between the industry and policymakers.