Microsoft’s communications chief has stepped in to shut down a claim spreading online that the company fired American workers only to replace them with H-1B visa holders. Frank X. Shaw, who leads communications at Microsoft, posted a point-by-point rebuttal after the theory picked up steam in the days following the company’s July 6 announcement that it was cutting 4,800 jobs, roughly 2.1% of its global workforce, with the Xbox division absorbing the heaviest blow.“Lots of bad information out there—let’s clear it up,” Shaw wrote. His central argument: the workforce changes were made because the Xbox business is struggling, not because Microsoft wanted cheaper foreign labour. “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,” he said. He also pushed back on the visa numbers being cited, saying they don’t mean what people think they mean.
The H-1B numbers being shared don’t belong to Xbox
Shaw’s most specific correction was about the data itself. The H-1B figures circulating online, he said, are Microsoft-wide visa renewals and new hire applications—not Xbox-specific filings. They also account for a small percentage of Microsoft’s total workforce, which stood at more than 220,000 before the cuts.He added a detail that cuts directly against the narrative: the majority of roles eliminated were not American roles. That tracks with reporting around the layoffs, which noted that a significant share of the sales cuts landed outside the United States, and that less than 1% of Microsoft’s workforce in Washington state was let go.Shaw made two more points for good measure. Xbox, he said, is the largest employer of American workers in the gaming industry and the largest American gaming company. And Asha Sharma, the Xbox CEO now steering the restructuring, is “an American born, raised, and educated CEO, from Wisconsin.”
What actually happened at Xbox on July 6
The restructuring Shaw referenced is real and it is deep. Xbox is cutting 3,200 roles in total—1,600 immediately, with another 1,600 exiting through fiscal year 2027. That amounts to about 20% of the division.Four studios are leaving the company. Compulsion Games and Double Fine Productions return to independence with their intellectual property and back catalogues intact. Ninja Theory and Undead Labs have entered terms with new owners. Arkane’s French operation has begun a works council consultation over what Sharma called potential strategic options—a process that could end in a sale or closure.Sharma has not been shy about the diagnosis. She told employees the business “is not healthy,” with profit margins three to ten times lower than rivals, and said Xbox’s platform teams are 40% larger than at the start of the console generation even as players and playtime have fallen. In a typical year, she wrote, Xbox lost 64 cents for every dollar it put into its studios.
Microsoft says AI didn’t take these jobs, but it is changing them
The other explanation floating around is that AI ate the jobs. Microsoft has denied that too. HR chief Amy Coleman told employees plainly that “the roles eliminated today are not being replaced by AI,” while conceding that “AI is changing how work gets done.”What is undisputed is the spending. Microsoft expects to pour roughly $190 billion into data centres and infrastructure this calendar year, up more than 60% from 2025, even as its headcount shrinks and its stock sits down about 19% for the year.The math is hard to ignore. Coleman said Microsoft has redeployed more than 4,000 employees into new roles over the past year, and that over 30% of eligible staff took a voluntary retirement package rather than wait for a layoff notice. She also warned there is more to come: other parts of the business, she wrote, will need to make similar changes. For a company betting nine figures a quarter on AI infrastructure, trimming headcount is how the sums are made to work.
