Microsoft Responds To Racist Conspiracy Theories About Layoffs: ‘They Were Not Made To Replace Employees With Foreign Workers’

The “Xbox reset” is a misery. An unforgivable consequence of an era of mismanagement. Studios under their umbrella have been let go or eviscerated as Microsoft aims to lay off over 3,000 employees. The turmoil has made its way to Fox News, whose “fury” framing of it has dredged up the “Great Replacement Theory” circuit and speculation stemming from CEO Asha Sharma’s race. It has prompted Microsoft to respond, albeit to the least legitimate criticism of their rampage.

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

“Lots of bad information out there –let’s clear it up,” posted Microsoft communications lead Frank Shaw. “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.”

In Fox’s write up, they center the controversial firing of thousands of employees around the simultaneous sponsorship for half as many H-1B visas. Fox also mentions Sharma’s Indian background. It has already prompted a flood of ill faith conspiracies, including from elected officials.

“This is INSANE. LEGAL immigration is a major problem. These companies, especially big tech, are abusing these immigration programs to replace American workers with foreign workers,” West Virginia’s Riley Moore tells Fox. “It’s long past time to end the H-1B scam.”

Shaw pushes back on these assumptions, noting that the visa sponsorships are Microsoft-wide, not Xbox specific. He highlights the obvious inconsistency with Fox’s framework: That the layoffs hit employees worldwide. Compulsion Games, who were let go, are Canadian. Arkane, whose fate is unclear, is shielded by French labor laws. Many of id Software’s losses were in Germany. He also points out that Sharma was born in Wisconsin, though that’s never stopped conservative media from attacking minorities along the Great Lakes. Shaw even takes the time to respond to verified X posters with fewer followers than my local Thai restaurant, with handles like “Modern Stand Up Philosopher.”

AMERICAN JOBS FOR AMERICAN WORKERS!

It's long past time to end the H-1B, OPT, STEM-OPT, and CPT scams. pic.twitter.com/ATXbLx9Cnp

— Rep. Riley M. Moore (@RepRileyMoore) July 9, 2026

Controversy around worker visas, legal immigrants and pandering to the Great Replacement set has been an ongoing thread in Trump’s second term. This month marked one of his greatest setbacks as the Supreme Court voted to uphold the 14th Amendment, but since re-entering office Trump has attacked H-1B workers, trying to tack on a prohibitive six-figure fee to applications.

It’s no secret that Silicon Valley is a big beneficiary of sponsored visas. The conspiracies boosted by the likes of Elon Musk have created a fissure in the tech sector between those focused on their bottom line and those focused on impressing internet friends. Obviously there are fair criticisms to be made about labor rights and exploitative treatment of migrant workers. But like the awfulness around Xbox it’s impossible to go anywhere but the pits if you’re lobbying from the position of barring non-whites from public life.