A suspicious U.S. Senator is asking Microsoft just exactly how it plans to cut those 5,000 jobs, fearing that the software mammoth prefers foreign workers over Americans.

Yesterday Microsoft shocked Wall Street by announcing plans to slash up to 5,000 jobs due to poor quarterly results, dropping nearly 11 percent and hitting its lowest level since January 1998. According to Microsoft, the loss stems from poor PC sales and the sudden popularity of low-cost netbooks; the company also predicted that profit and revenue would drop over the next two quarters. Microsoft's loss created a ripple throughout financial markets, forcing investors to seek safer assets thus plunging Nasdaq numbers and skyrocketing U.S. Treasury debt prices.

"Our financial position is solid ... but it is also clear that we are not immune to the effects of the economy," Chief Executive Steve Ballmer told employees in a letter. "Consumers and businesses have reined in spending, which is affecting PC shipments and IT expenditures."

After yesterday's announcement, U.S. Senator Charles Grassley, an Iowa Republican, addressed Microsoft's Chief Executive Steve Ballmer via this letter. The senator's main issue with Microsoft is whether the company will be retaining foreign guest workers rather than similarly qualified American employees when it implements the layoff plan. The Senator requested that Microsoft provide a breakdown of the jobs scheduled for elimination, and to provide the ratio between American layoffs and those with H-1B visas.

According to Grassley, Microsoft is an advocate of the H-1B visa program, a temporary visa program enabling American universities and companies to hire foreign workers -defined under the "specialty occupation" category- when there is not sufficient American workforce to meet current needs. Last year Microsoft lobbied Congress for an expansion of the H-1B program, wanting to raise the current cap of 65,000 H-1B visas. Grassley, the top Republican on the Senate Finance Committee, is quite familiar with Microsoft's involvement, claiming that the company employs thousands of workers through the program. In some ways, the Senator seems a little suspicious of Microsoft, almost passively accusing the company of discriminatory layoffs.

Still, the Senator believes that Microsoft's priority should be American jobs. "My point is that during a layoff, companies should not be retaining H-1B or other work visa program employees over qualified American workers," he said in the January 22 letter. "Our immigration policy is not intended to harm the American workforce.  I encourage Microsoft to ensure that Americans are given priority in job retention.  Microsoft has a moral obligation to protect these American workers by putting them first during these difficult economic times."

As of this writing, Microsoft had not received the Senator's letter, but a Microsoft spokeswoman told Reuters that it would respond to Grassley directly.