Microsoft has defended Xbox chief executive Asha Sharma after online attacks linked the gaming division’s sweeping job cuts to her family heritage and the company’s recruitment of foreign workers in the United States.
The technology group rejected allegations that Xbox was dismissing American employees to replace them with workers holding H-1B visas. Frank X Shaw, Microsoft’s chief communications officer, said Sharma was an American executive who was born, raised and educated in Wisconsin, challenging attempts to portray her as a foreign decision-maker.
Sharma became the focus of hostile social media posts after Xbox announced plans to eliminate about 3,200 positions during Microsoft’s 2027 financial year. Around 1,600 employees were affected immediately, with the remaining reductions expected to take place in stages over the year.
The Xbox cuts form part of a broader Microsoft restructuring involving about 4,800 jobs, equivalent to roughly 2.1 per cent of the company’s global workforce. Commercial sales operations and gaming were among the areas most heavily affected.
Online criticism intensified after figures circulated showing that Microsoft had received approvals connected to more than 2,000 H-1B positions. Critics claimed the figures demonstrated that American workers were being dismissed while foreign employees were being recruited at lower cost.
Microsoft said the visa numbers applied across the wider company and were not evidence that laid-off Xbox employees were being replaced. Visa holders were also affected by the restructuring, while many of the approved positions related to specialised roles across Microsoft’s cloud, artificial intelligence, engineering and enterprise software operations.
Shaw said the Xbox reductions were driven by the financial condition of the division rather than immigration policy. He also said the gaming business remained one of the largest employers of American workers in its sector.
The dispute reflects growing political tension in the United States over skilled-worker visas, corporate layoffs and the rapid expansion of artificial intelligence. Technology companies argue that the H-1B programme helps them recruit specialists when suitable skills are difficult to find domestically. Opponents say the system can weaken workers’ bargaining power and allow companies to reduce labour costs.
Sharma’s heritage became a prominent part of the online campaign despite the absence of evidence connecting her background to Microsoft’s visa strategy. Several posts described her as an overseas executive or used the Xbox cuts to make broader claims about workers of South Asian origin.
The attacks shifted attention away from the commercial problems that prompted the restructuring. Sharma told employees that Xbox had spread its investments too widely and needed to concentrate resources on businesses capable of producing sustainable returns.
Xbox has faced pressure from weak console sales, rising hardware costs and lower profit margins than several major competitors. Microsoft’s $69 billion acquisition of Activision Blizzard expanded its portfolio of franchises, studios and employees, but also increased the complexity and cost of running the gaming business.
The restructuring will remove four studios from direct Xbox management. Compulsion Games and Double Fine Productions are expected to operate independently, while Ninja Theory and Undead Labs are moving to new ownership arrangements. Microsoft has also been considering changes involving other studios and projects.
The company is reducing management layers, external spending and overlapping functions while continuing to invest in consoles, subscriptions, cloud gaming and titles for multiple platforms. Sharma has described the changes as the most significant restructuring in Xbox history.
Her appointment in February marked an unusual leadership choice. Sharma previously held senior positions at Microsoft’s CoreAI operation, Instacart, Facebook and the home-services platform Porch, but had not built her career in the games industry. She succeeded long-serving gaming chief Phil Spencer and was selected partly for her experience in product development, operations and user growth.
Born in Racine, Wisconsin, Sharma studied at the University of Minnesota’s Carlson School of Management. Her record in technology and consumer platforms helped her rise through senior executive roles before she returned to Microsoft in 2024.
The controversy has also been sharpened by her appointment to a Federal Reserve task force examining jobs, productivity and technological change. She will help lead the group alongside investor Marc Andreessen and Stanford economist Charles Jones.
