- Status: Active layoffs underway
- Affected divisions: Xbox Game Studios, including Bethesda/ZeniMax
- Scope: Part of Microsoft’s broader 4,800 job cut initiative
The latest round of corporate restructuring at Microsoft is hitting hard. As part of a company-wide reduction that includes 4,800 total cuts, the Xbox division is seeing significant changes. Specifically, 3,200 positions within Xbox are being eliminated: 1,600 immediately and another 1,600 over the next 12 months.
This isn’t just a numbers game on paper; it’s reshaping the teams behind some of gaming’s biggest franchises. Reports indicate that ZeniMax Media and Bethesda Game Studios are facing a “significant overhaul.” These studios, responsible for iconic IPs like Fallout, The Elder Scrolls, and DOOM, are being pivoted to focus more heavily on core properties including Wolfenstein and Quake.
Bethesda union speaks out
In response to the news, the official labor union for Bethesda Game Studios took to social media to express deep frustration. The union highlighted that this is not an isolated incident but part of a recurring pattern.
“When will this cycle of cuts in pursuit of ever-greater profits end?” the union asked in a public statement. They noted that over 10,000 developers have already been cut in previous rounds since 2023, yet leadership deems those reductions insufficient.
The union emphasized their role in negotiating better severance packages and support for departing employees. “Because of our One BGS union, we have the right to negotiate over the impacts of these layoffs,” they stated, promising to do everything possible to ensure affected colleagues are taken care of.
A history of cuts
These recent moves follow a turbulent few years for Microsoft’s gaming division. In 2023, the company cut 10,000 jobs. Early 2025 saw additional performance-based reductions. Last year, the closure of The Initiative and other studio cancellations accompanied 9,000 more discharges across the firm.
Xbox CEO Asha Sharma has stated that Microsoft “overextended” with its gaming acquisitions, framing these layoffs as necessary corrections. However, for the developers on the ground, the repeated instability is causing widespread concern about the future of their careers and the games they build.
What this means for you
If you are a fan of Bethesda titles, expect potential delays or shifts in development focus as teams restructure. For industry professionals, this highlights the ongoing volatility in the gaming sector post-pandemic. The union’s involvement suggests that labor relations at Microsoft studios may continue to be a focal point for future negotiations.
Source: Windows Central
Over to you: Do you think Microsoft’s focus on core IPs will improve game quality, or does it signal a lack of innovation?
