Microsoft responds to racist Xbox layoff conspiracy theory, says CEO Asha Sharma is 'American born, raised, and educated'

I've seen a lot of complaints and concerns about the layoffs at Xbox that put 3,200 people out of work and resulted in the spinoff of four studios—eventually five, once the Arkane situation is sorted. One I haven't run across is a claim that it's all part of an effort to take jobs away from Americans and replace them with non-Americans on H-1B visas. That changed today, though, when Microsoft chief communications officer Frank X. Shaw took to social media to deny the claim.

The allegations are apparently rooted in stories like this one from Fox News, with the headline, "Fury erupts as US brand fires 1,600 employees after securing thousands of foreign worker visas."

Fox noted that Microsoft is laying off roughly 4,800 employees in total, the bulk of them from Xbox, while at the same time acquiring authorization "to hire from foreign countries 2,273 employer-sponsored, non-immigrant workers under what is known as the H-1B visa program."

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Quoting a series of random people on X, the report states that "furious online critics claim that American jobs are being unfairly handed to foreigners," adding that "some online critics [have] claimed Sharma's Indian heritage played a role in firing the Americans, given the percentage of H-1B workers from India."

The H-1B is a non-immigrant visa that allows US business to hire foreign workers to fill certain speciality occupations. Criticism of the program and its impact on US workers has waxed and waned over the years, but it's taken on particular prominence during the second Trump administration: Earlier this year, Trump attempted to impose a $100,000 application fee for H-1B visas, although that was eventually overturned by courts. The Republican party continues to lean into it as a wedge issue, however: Vice President JD Vance, for instance, said during a recent speech that "American jobs ought to go to American workers and not foreign fraudsters, and the Department of Labor is fighting back against it."

It's the sort of rhetoric that can lead to bad places, and the accusations of H-1B visa abuse, accompanied by plenty of naked racism, has spawned countless posts, re-posts, and likes, particularly on X—enough to prompt Shaw to speak out.

"Lots of bad information out there—let's clear it up," Shaw wrote in his message. "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.

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"The H-1B figures being referenced are Microsoft-wide visa renewals and new hire applications. They are not specific to Xbox and represent a small percentage of Microsoft's overall workforce. And the majority of roles impacted were not American roles."

Shaw also made a point of saying that "Xbox is the largest employer of American workers in the gaming industry and the largest American gaming company," and that its CEO is "American born, raised, and educated."

(Image credit: Frank X. Shaw (Twitter))

Earlier this week, the US Federal Reserve appointed Sharma to a new Productivity and Jobs task force, where she will help "assess the economic impact of new general-purpose technologies, including artificial intelligence, to inform the Federal Reserve's policy judgments."