It's been a rough stretch for the tech world. If you’ve been following the news lately, you know Microsoft has been in the hot seat—and not just for its AI pivot. The company recently cut loose thousands of workers, only to turn around and file thousands of H-1B visa applications. Honestly, the optics are terrible. People are frustrated, and politicians like Vice President JD Vance haven't held back, basically accusing the company of dumping American talent to import cheaper labor.
But Microsoft finally broke its silence. They’re pushing back hard against the idea that these two things are linked.
The Heart of the Controversy: 9,000 Jobs vs. Thousands of Visas
The drama hit a boiling point in July 2025. Microsoft confirmed it was laying off around 9,000 employees, which is about 4% of its global workforce. This wasn't the first time the axe fell that year, either. Total job cuts for 2025 have crept up toward the 16,000 mark.
Then came the data. Reports started circulating that while Microsoft was handing out pink slips, it was also filing roughly 4,712 to 6,000 H-1B visa petitions.
What Microsoft is saying
Microsoft's response was blunt. A spokesperson told CFO Dive that their H-1B applications are "in no way related" to the job eliminations. Why? Because, according to them, the math doesn't show what people think it shows.
The company's primary defense rests on one big number: 78%.
👉 See also: Why Doppler Radar Overland Park KS Data Isn't Always What You See on Your Phone
They claim that 78% of the H-1B petitions they filed over the last year weren't for new people coming into the country. Instead, they were extensions for existing employees who were already working at the company. In their view, they aren't "replacing" Americans; they’re just trying to keep the international experts they already have.
Microsoft Responds to Criticism of H-1B Visas After Layoffs and Political Fire
The timing of this response wasn't accidental. It came right after JD Vance slammed Big Tech during a bipartisan event. He called the practice of laying off 9,000 workers while applying for overseas visas a "bulls**t story."
It’s a sentiment that resonates with a lot of people who feel like the "talent shortage" in America is a myth used to suppress wages.
Breaking down the visa math
If we look at the numbers, the tension is clear.
- Layoffs: ~9,000 in the latest round.
- H-1B Petitions: ~5,189 newly approved beneficiaries in fiscal year 2025.
- The Overlap: Microsoft points out that H-1B workers were also included in the layoffs.
Basically, they’re saying the cuts were across the board. If you were in a division that got restructured, it didn't matter if you were a US citizen or a visa holder; you were likely gone.
✨ Don't miss: Why Browns Ferry Nuclear Station is Still the Workhorse of the South
Why This Matters for the Tech Workforce
Is Microsoft just following the rules, or is something else going on?
Critics like Steven Camarota from the Center for Immigration Studies argue that the data never actually supports the idea of a massive worker shortage. On the flip side, Microsoft's General Counsel, Brad Smith, has long argued that the "future success" of the company depends on recruiting the best talent globally, regardless of where they were born.
There's also the AI factor. Microsoft is pouring billions into data centers and AI infrastructure (think GitHub Copilot and OpenAI partnerships). They’re shifting their weight. As they lean into AI, they’re cutting "traditional" roles like sales and middle management, while aggressively hiring for specialized engineering roles.
The Human Cost
For those on H-1B visas who did get laid off, the situation is a nightmare. Unlike US citizens who can take their time finding a new gig, visa holders usually only have a 60-day grace period to find a new sponsor or leave the country. It’s a high-stakes game of musical chairs.
What Most People Get Wrong
People often assume every H-1B filing represents a new person taking a job from an American. But as Microsoft pointed out, a huge chunk of those filings are just administrative paperwork to keep current staff legal.
🔗 Read more: Why Amazon Checkout Not Working Today Is Driving Everyone Crazy
That said, the skepticism isn't going away. Senator Chuck Grassley and others have pushed for more transparency, asking if Microsoft makes a "good faith effort" to hire Americans first. The company maintains that they do, but the political climate in 2026 is making that a harder sell.
Practical Steps and Insights
If you’re working in tech or looking to enter the field, the landscape is shifting. Here is what you actually need to know:
- Skill up in AI: Microsoft isn't stopping its hiring; it's just changing who it hires. Roles in AI infrastructure and machine learning are still seeing growth even during broader layoffs.
- Watch the Policy: The Trump administration has proposed significant changes, including a $100,000 annual fee on H-1B visas. If that sticks, the cost of hiring foreign workers will skyrocket, which might finally force companies to pivot back to domestic talent pools.
- Know Your Rights: If you’re a visa holder, have a "Plan B" ready. Options like the F-1 Day 1 CPT program are becoming popular for those who need to maintain legal status after a sudden layoff.
- Check the Wages: The Department of Labor is pushing for higher wage floors for H-1B holders. This is designed to ensure foreign workers aren't used to undercut American salaries.
Microsoft is trying to navigate a world where they need specialized skills to win the AI race, but they’re doing it during a period of intense economic nationalism. Whether their explanation about "extensions vs. new hires" satisfies the public remains to be seen. For now, the "enigma of success"—as Satya Nadella once called it—continues to be a painful reality for thousands of workers caught in the middle.
To stay ahead of these shifts, focus on high-complexity roles that are less susceptible to "restructuring" and keep a close eye on the Department of Labor’s quarterly H-1B disclosure data to see which teams are actually growing.