Microsoft has announced significant workforce reductions affecting its Xbox division and the broader company, the bulk of whom will be replaced by foreign workers. The Xbox unit plans to eliminate approximately 3,200 positions through the end of fiscal year 2027, including about 1,600 role eliminations effective immediately.
These changes form part of a larger restructuring that includes an additional 4,800 positions eliminated company-wide.
Xbox CEO Asha Sharma outlined the moves in a memo to employees. “We are beginning the most significant restructure in XBOX history. 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,” she said.
Sharma noted that the business “today is not healthy” and that Xbox is “operating at margins that are 3–10x lower than comparable platform and publishing businesses.” She described the effort as a “reset” to achieve sustainable growth and a return to growth by 2027.
As part of the changes, Compulsion Games and Double Fine Productions are transitioning to independent status with their intellectual property, while Ninja Theory and Undead Labs are moving to new ownership to complete ongoing projects such as Senua’s Saga: Hellblade II sequels and State of Decay 3.
While thousands of workers are set to lose their jobs, federal data from U.S. Citizenship and Immigration Services indicates that Microsoft received approval this year for 2,273 employer-sponsored H-1B visas for nonimmigrant workers in specialty occupations. The H-1B program permits U.S. employers to hire foreign workers in roles requiring specialized knowledge when qualified U.S. workers are not available.
A Microsoft spokesperson responded to questions about the timing of the layoffs and visa approvals by defending the decision. “These decisions are based on business need, not visa status. H-1B employees were also impacted by job eliminations in the U.S.”
The combination of the layoffs and the visa approvals has drawn criticism from some members of congress and advocacy groups. “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. No more. It’s long past time to end the H-1B scam,” said U.S. Rep. Riley Moore (R-WV).
Separately, the Trump administration has taken steps regarding the H-1B program. In September 2025, President Trump signed executive orders that included a $100,000 fee for certain H-1B visas and introduced the “Trump Gold Card” visa program offering a pathway to permanent residency and citizenship for a $1 million investment.
A federal judge later blocked the fee increase, though the administration indicated plans to appeal.
