During the COVID-19 pandemic, the market environment for the information technology (IT) industry changed dramatically, presenting companies with numerous obstacles in day-to-day management activities and changing business needs. Previous studies found that job insecurity due to COVID-19 significantly impacted millennials. Our research explored the effect of job insecurity on counterproductive work behavior among millennial employees during the COVID-19 period, using moral disengagement as a mediating variable, and psychological capital and negative emotions as moderating variables. In this study, 298 employees working in Chinese IT companies completed the questionnaire survey. We collected data from employees over three different time intervals (baseline, three weeks later, and six weeks later) to mitigate the issues of common method bias and single-source data. We analyzed the collected data using SPSS25.0 and Amos24.0 for structural modeling. Our research results indicate that job insecurity is positively associated with counterproductive work behavior, and moral disengagement plays a mediating role. In addition, psychological capital moderates the relationship between job insecurity, moral disengagement, and counterproductive work behavior. Negative emotions also moderate the mediating effect of moral disengagement between job insecurity and CWB.