Microsoft is undertaking a major restructuring that will eliminate thousands of jobs across the company, including significant cuts to its Xbox division, while simultaneously drawing criticism over its continued use of the H-1B visa program.
The company announced that approximately 3,200 positions within Xbox will be eliminated through the end of fiscal year 2027, with about 1,600 employees losing their jobs immediately. The Xbox reductions are part of a broader corporate restructuring that includes an additional 4,800 layoffs across Microsoft.
Xbox CEO Asha Sharma informed employees of the changes in a company memo, describing the restructuring as the largest in the gaming division’s history.
“We are beginning the most significant restructure in XBOX history,” Sharma wrote. “After careful consideration, I’ve made the difficult decision to reduce our team by approximately 3,200 throughout FY27. This will include approximately 1,600 role eliminations today, and in addition, four studios will leave XBOX to new management.”
Sharma said the changes are intended to improve the division’s long-term financial outlook.
“The business today is not healthy,” she wrote, adding that Xbox is operating with margins “3–10x lower than comparable platform and publishing businesses.”
She described the restructuring as a “reset” designed to return the business to sustainable growth by 2027.
As part of the reorganization, Compulsion Games and Double Fine Productions will become independent studios while retaining their intellectual property. Meanwhile, Ninja Theory and Undead Labs will transition to new ownership while continuing work on projects including future installments of Senua’s Saga: Hellblade II and State of Decay 3.
The layoffs have attracted additional attention because federal immigration records show Microsoft also received approval this year for 2,273 H-1B visas, which allow U.S. employers to hire foreign workers in specialty occupations.
Critics have questioned the timing of approving thousands of foreign-worker visas while simultaneously eliminating thousands of jobs.
Microsoft defended its hiring practices in a statement.
“These decisions are based on business need, not visa status,” a company spokesperson said. “H-1B employees were also impacted by job eliminations in the U.S.”
The H-1B visa program allows employers to sponsor foreign professionals for positions requiring specialized knowledge, particularly in technology, engineering and other technical fields, per Trending Politics.
The layoffs and visa approvals prompted criticism from some Republican lawmakers.
Rep. Riley Moore (R-WV) argued the program is being misused by major technology companies.
“This is INSANE,” Moore said. “LEGAL immigration is a major problem. These companies, especially big tech, are abusing these immigration programs to replace American workers with foreign workers. No more. It’s long past time to end the H-1B scam.”
Supporters of the H-1B program, however, have long argued that it helps companies fill highly specialized positions when qualified domestic workers are unavailable.
The developments also come as the Trump administration continues pursuing changes to employment-based immigration.
In September 2025, President Donald Trump signed executive orders imposing a $100,000 fee on certain H-1B visas while introducing the “Trump Gold Card” program, which would provide a pathway to permanent residency and citizenship for individuals making a $1 million investment in the United States.
A federal judge later blocked the H-1B fee increase, although the administration has indicated it plans to appeal the ruling.
Microsoft has not announced additional layoffs beyond those already disclosed, and the company maintains that its workforce reductions and visa sponsorship decisions were made independently based on operational and business needs.
