Microsoft announced a round of layoffs that initially affected 1,600 employees and is expected to reach about 3,200 over the next year. Communications lead Frank X. Shaw said the cuts were part of a restructuring of the Xbox business and were not intended to replace workers with foreign labor.

Shaw posted on Twitter that while some Microsoft employees hold H‑1B visas, they represent a small share of the overall workforce and are not limited to Xbox roles. He added that most of the positions eliminated were not American‑based.

The statement follows reports by conservative outlets that Microsoft had been approved for more than 2,200 H‑1B visas this year. Fox News reported that Microsoft had indicated H‑1B employees were among those affected before the story was published.

In addition to the workforce reduction, Microsoft said it would separate from five game studios. Double Fine and Compulsion Games will operate as independent studios, while Ninja Theory and Undead Labs are being sold to an undisclosed buyer. Microsoft is also reviewing the future of Arkane.

Id Software, which lost roughly half its staff as it prepared the Doom: The Dark Ages expansion, was among the hardest‑hit studios.

Microsoft has not provided a timeline for when the restructuring will be completed, and the long‑term impact on the Xbox division remains unclear.