Xbox CEO Asha Sharma is facing accusations that Microsoft is replacing American employees with foreign workers following the company’s latest round of mass layoffs.
The controversy has been growing since Microsoft announced plans earlier this month to eliminate approximately 4,800 positions worldwide. Around 1,600 Xbox employees were laid off immediately, with another 1,600 gaming positions expected to disappear before the end of the fiscal year.
The Game Pass logo – Microsoft, XBOX
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At the same time, critics noted that Microsoft had received approval for thousands of H-1B visa petitions. The program allows American companies to employ foreign workers in specialized occupations.
Just days after the Xbox announcement, the Federal Reserve appointed Sharma to an advisory task force that will “assess the economic impact of new general-purpose technologies, including artificial intelligence, to inform the Federal Reserve’s policy judgments.”
The timing placed increased scrutiny on Sharma. However, conflicting reports have emerged over the number of American workers affected and whether Microsoft’s H-1B visa approvals are directly connected to the cuts.
Congressman Demands Sharma’s Removal
This week, West Virginia Rep. Riley Moore sent a letter to Federal Reserve Chair Kevin Warsh demanding Sharma’s removal from the task force.
🚨 JUST IN: Fed Chair Kevin Warsh is now receiving calls to FIRE Xbox CEO Asha Sharma from the Fed’s Task Force after she was exposed HIRING H-1B WORKERS to replace Americans
Sharma laid off thousands of Americans — then hired foreigners.
REP. RILEY MOORE: “I want her REMOVED!… pic.twitter.com/bEztRT2q6g
— Eric Daugherty (@EricLDaugh) July 22, 2026
“I want her removed. She’s the head of Productivity and Jobs on this task force. What’s the strategy? Fire your workforce and apply for H-1B visas? The H-1B visa program needs to be done away with. It’s a scam, replacing our people in the United States.” Rep. Moore told Fox News.
However, Microsoft strongly denies that Xbox dismissed American employees to replace them with H-1B visa recipients.
Microsoft Disputes the Allegations
Chief Communications Officer Frank X. Shaw claims that the layoffs were driven by Xbox’s financial condition and were unrelated to employees’ immigration status.
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.
• The H-1B figures being referenced are Microsoft-wide visa…— Frank X. Shaw (@fxshaw) July 10, 2026
The company also disputed how the visa figures were being presented. According to Microsoft, the 2,273 approvals cover the entire corporation rather than the Xbox division alone.
Of that total, 1,533 were reportedly renewals for existing Microsoft employees. The remaining 740 involved workers who were already living in the United States and moving to Microsoft from other companies.
A screenshot of Master Chief via Halo YouTube
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Microsoft also said H-1B employees were among those affected by its American layoffs. Furthermore, the company claims that most of the positions eliminated during the broader restructuring were located outside the United States.
Those details challenge the claim that Sharma personally hired thousands of foreign workers to replace American Xbox employees. No publicly available evidence has established a direct connection between the eliminated positions and Microsoft’s H-1B applications.
Xbox Undergoes a Financial Reset
Sharma previously explained that the gaming division was undergoing a necessary financial reset.
“Our business today is not healthy,” she wrote in a company memo. “We are operating at margins that are 3-10x lower than comparable platform and publishing businesses.”
This is an important email I sent today to all employees at XBOX:
Team,
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…
— ASHA (@asha_shar) July 6, 2026
Microsoft is eliminating approximately 3,200 Xbox positions while selling or spinning off several development studios. The broader company is cutting 4,800 jobs globally. Microsoft’s H-1B approvals and layoffs are therefore both documented.
Conflicting Claims Remain
Whether Sharma’s approved layoffs and Microsoft’s H-1B applications represent a coordinated effort to replace American workers remains in dispute.
Asha Sharma at Microsoft Ignite 2024 – Microsoft Events, YouTube
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What is clear is that the timing of those events, combined with her appointment to the federal task force, has placed the Xbox CEO at the center of a much larger debate over immigration, corporate hiring, and American jobs.
Do you think Asha Sharma fired American workers at Xbox in favor of H-1B recipients? Sound off and let us know!
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