Numerical modeling offers considerable promise to reduce costs associated with trial-and-error process in the manufacturing industry. In laser cutting of fiber-reinforced composites, the developed thermal stress in the cut region has considerable influence on the application of the machined composite and the end product quality. Nevertheless, measurement of the thermal stress is quite challenging in practice. Here, an uncoupled thermo-mechanical finite element model is developed to accurately predict formation of heat-affected zone, kerf width, thermal field, and thermal residual stress of an anisotropic carbon/Kevlar fiber reinforced composite during multi-pass laser cutting process. A novel approach of element deletion incorporating temperature-dependent Hashin failure criteria and VUMAT subroutine is proposed. The study is carried out using Abaqus interlinked with Fortran compiler to define laser Gaussian beam (DFLUX subroutine) and material removal (VUMAT subroutine) for determining the temperature gradient and cut characteristics, respectively. The numerical results agree well with the experimental scanning electron micrographs of heat-affected zone and kerf width. In addition, residual temperature after subsequent pass results in greater temperature distribution and heat accumulation. It has also been established that the strength of composite gradually decays with the increase of temperature due to stiffness (elastic moduli) degradation in the area of the cutting zone, accelerating damage initiation in both fibers and matrix.