H-1B Fraud Investigation Widens as Microsoft's Xbox Layoffs Become GOP Flashpoint

A visa fight built on one company's layoffs

Rep. Riley Moore (R-WV) says the H-1B visa program is being used by major corporations to push American workers out of their jobs, and he's using Microsoft's Xbox restructuring as his lead example.

"The H-1B visa program is being abused at levels I don't think most understand," Moore said on Breitbart News Saturday, hosted by Matthew Boyle. He said the abuse runs both ways: applicants gaming the system and companies exploiting it to cut labor costs.

Moore's target is specific. Xbox CEO Asha Sharma announced roughly 3,200 job cuts across the gaming division through fiscal year 2027, with about 1,600 eliminated immediately, according to a company memo reported by resistthemainstream. Sharma called it "the most significant restructure in Xbox history," saying the division's margins run "3–10x lower" than comparable platform and publishing businesses. The cuts are part of a wider Microsoft restructuring that includes 4,800 layoffs companywide.

Federal records show Microsoft was also approved this year for 2,273 H-1B visas, according to resistthemainstream. Moore has drawn a straight line between the two numbers. "This is INSANE," he said. "These companies, especially big tech, are abusing these immigration programs to replace American workers with foreign workers. It's long past time to end the H-1B scam."

What Microsoft actually says

Microsoft disputes the connection Moore is drawing. "These decisions are based on business need, not visa status," a company spokesperson said, adding that "H-1B employees were also impacted by job eliminations in the U.S.," according to resistthemainstream. Microsoft has not said the Xbox layoffs were driven by, or replaced with, H-1B hiring. The company continues to sponsor foreign workers for specialized engineering roles while cutting other parts of its business, a pattern Great Andhra noted is common across large tech firms managing simultaneous growth and contraction in different units.

Visa approvals and layoffs happening in the same fiscal year at the same company is documented. Whether the visas were used to directly backfill the eliminated Xbox roles is not established by any source here. No filing, audit, or investigation cited in this reporting confirms a one-to-one replacement.

The fraud investigation is real, but incomplete

Separately from the Microsoft dispute, Labor Department Inspector General Anthony D'Esposito says his office is investigating alleged misuse of the H-1B and PERM programs, including claims that some foreign workers are being forced to kick back portions of their wages to criminal organizations, according to Great Andhra. D'Esposito said subpoenas have already gone out as part of a broader probe supported by a White House task force. Vice President JD Vance separately said the Department of Labor has opened dozens of subpoenas and investigations into visa fraud, Breitbart reported.

These are allegations under active investigation, not proven findings. The Labor Department has not released any results, and Great Andhra reported plainly that "no public evidence has been presented to support broader claims" about wage suppression tied to the program. The wage-kickback claim, if substantiated, would point to criminal exploitation of foreign workers themselves, not just displacement of Americans. This complicates the simple "companies vs. American workers" framing some coverage leans on.

The STEM shortage argument, both sides

Companies that sponsor H-1B workers argue there's a genuine shortage of specialized STEM talent in the U.S., particularly in advanced software and engineering roles, and that the program lets them fill gaps quickly to stay competitive globally. That's a real business argument, not an invented one.

Moore rejects it. In September 2025, he secured an amendment through the House Appropriations Committee directing the Department of Labor to investigate what he calls a "false STEM workforce shortage" and report on how the H-1B and Schedule A programs affect American workers, according to the Times of India. "The H-1B program has been grossly abused to undercut the American worker and replace domestic talent with foreign workers," Moore posted on X at the time. The Times of India noted research suggesting some shortage claims are inflated while American STEM graduates struggle to find work, though that research wasn't detailed by name in available reporting.

Moore has also criticized the Optional Practical Training program, especially STEM OPT, arguing it lets foreign graduates work in the U.S. while American students are passed over, per Great Andhra.

What happens next

The Trump administration is reportedly working on an overhaul that would restrict H-1B use to genuinely high-skill, high-wage roles and bar entry-level hiring through the program, according to the Times of India. Whether that overhaul advances and whether D'Esposito's investigation produces public findings on the wage-kickback allegations is unclear. Until the Labor Department releases actual results, the Xbox layoffs stand as a timing coincidence Moore is treating as proof, and Microsoft is treating as unrelated business math.