Former Bethesda employees have described the personal and professional impact of Microsoft’s latest Xbox layoffs, saying some staff believed their work on major franchises such as The Elder Scrolls and Fallout would help protect their jobs. In a new Guardian report based on interviews with affected employees and union representatives, workers detailed abrupt dismissal meetings, uncertainty over how roles were selected and concerns about the experience being lost from Bethesda’s development teams.
Microsoft announced a major restructuring of Xbox on July 6, saying 3,200 positions would be eliminated during the financial year through 2027, with 1,600 roles affected immediately. The cuts reached studios across the company’s gaming organization, including Bethesda Game Studios and ZeniMax Online Studios. In the United States, affected workers remain on payroll through September 4 under federal WARN Act requirements while union representatives continue bargaining with Microsoft over severance and other benefits.
Anne Barrett, who worked at Bethesda Game Studios Austin for seven years, told The Guardian that employees had heard rumors of another round of layoffs before the announcement but still believed Bethesda’s position might provide some security. She pointed to the studio’s association with Skyrim and Fallout, as well as highly anticipated upcoming projects, as reasons workers thought their roles would be relatively safe. Instead, Barrett said some careers spanning decades were ended during extremely short virtual meetings.
The dismissal process itself has become a major source of frustration among former staff. Barrett said employees were brought into a Teams call where cameras and microphones were disabled, preventing them from responding while the decision was delivered. Workers were then warned that access to Slack, the communication platform heavily used by Bethesda’s remote teams, would soon disappear, prompting a rush of goodbye messages before access was removed.
Morgan Goin, formerly of ZeniMax Online Studios, described a similar experience, with employees exchanging contact details and farewells as the layoffs unfolded. Both Bethesda Game Studios and ZeniMax Online Studios became unionized in 2024, and affected workers are now involved in negotiations over severance and benefits. The union is also attempting to secure opportunities for some laid-off employees to return to positions elsewhere within Microsoft.
Employees interviewed by The Guardian also questioned how Microsoft decided who would lose their jobs. Alex Nguyen, a character artist and union bargainer who remains at Bethesda Game Studios Dallas, said experienced workers who had spent decades contributing to the studio were among those cut. Former staff said the apparent lack of a clear pattern made the restructuring harder to understand, particularly when highly specialized employees with deep knowledge of Bethesda’s technology and production methods were affected.
That loss of institutional knowledge has raised concerns about future projects. Barrett argued that experienced developers familiar with Bethesda’s proprietary tools and distinctive production processes cannot simply be replaced by bringing in new staff. Long-serving artists, engineers and other specialists often carry knowledge accumulated across multiple games, meaning departures can affect more than the headcount of an individual project.
The wider Xbox cuts have affected other studios as well. According to The Guardian, id Software lost 136 employees, representing a large portion of the Doom developer’s workforce. Former id Software VFX artist Derek Best subsequently described the studio as having been reduced to what he considered “support studio size,” although Microsoft has not announced that id Software’s formal role has changed.
Beyond production concerns, the interviews highlight the personal consequences of the restructuring. Former employees spoke about financial uncertainty, disrupted healthcare coverage and the emotional impact of suddenly losing colleagues they had worked alongside for years. Some described their reactions in terms similar to grief, particularly after spending much of their careers at the same studio.
Microsoft says negotiations with union-represented ZeniMax employees remain underway and that it has proposed severance terms comparable to those offered to non-union workers. The company’s offer includes up to 39 weeks of severance, six months of company-paid COBRA healthcare coverage and 16 weeks of outplacement support. Union representatives, however, say they are continuing to push for stronger terms for affected workers.
Another 1,600 positions are expected to be eliminated across Xbox as the restructuring continues through 2027. For Bethesda’s affected employees, the latest interviews show that even working on some of Microsoft’s most commercially important gaming franchises offered no guarantee of protection, while the long-term impact of losing experienced developers may not become fully visible until future projects move further through development.
