Bethesda suffers massive layoffs: what it means for starfield, elder scrolls 6, and the future of xbox
Xbox delivered a brutal blow to the gaming industry this week, announcing the largest restructuring in its history – a staggering 1,600 job cuts across its studios. The fallout extends far beyond simple cost-cutting, raising serious questions about the direction of Microsoft’s gaming ambitions and the fate of beloved franchises.
A cascade of cuts
The wave of layoffs hit bethesda Game Studios, id Software, and ZeniMax Online Studios with particular force. A WARN Act notice revealed a staggering 379 employees were dismissed from ZOS’s Cockeysville, MD office, and an additional 166 from ZeniMax Media Inc. in Rockville, MD. Across the board, 96 id Software staff in Richardson, Texas, and 40 remote roles were also eliminated, painting a grim picture of the scale of the restructuring.
Strategic shift, uncertain outcomes
Xbox CEO Asha Sharma’s strategy is a clear pivot: collaborative studio development, focusing on massive franchises like Halo, Minecraft, and Fallout. However, these changes come at a steep cost, immediately casting a shadow over projects like The Elder Scrolls 6. Initial reports suggest morale has plummeted, fueling fears of delayed development and a potential reliance on cheaper, contracted labor – a prospect deeply unsettling for veteran developers.
‘Tes 6’ under siege
One Bethesda developer, speaking anonymously, expressed concerns about being replaced by external contractors, citing proprietary tools and the need for extensive onboarding. “There is a fear that we are going to be replaced by cheaper, contracted labor, or we will hire folks to replace them that will need to be onboarded (our tools are proprietary, other devs aren’t going to know how they work) resulting in more delays, and we’ll need to crunch to make up the time,” they stated. IGN reported that staff expressed “crushing” disappointment, fearing a protracted development cycle for the highly anticipated RPG.
Fallout’s future, obsidian’s fate
The restructuring isn't just impacting Bethesda. Obsidian Entertainment, the studio behind Fallout: New Vegas, has also been affected, with 35 positions cut in the U.S. and 12 in Montreal. Meanwhile, the developer has begun talks with Microsoft to ensure the future of its projects. Adding to the uncertainty, Microsoft has confirmed that the developer is now working on a new Fallout game, with a potential release in 2027, while the studio also continues work on Starfield. Rumors suggest Starfield’s roadmap remains unchanged, though the game’s initially underwhelming reception raises questions about its long-term viability.
A tightening grip on resources
Beyond the immediate job losses, the restructuring signals a fundamental shift in Xbox’s approach. Braff’s memo emphasized a move “from a planning model primarily centered on what’s next for each independent studio to one that focuses on our strongest franchises and determining the content roadmap that best serves our players and Bethesda as a whole.” This centralization, combined with the looming layoffs, suggests a consolidation of power and a potentially streamlined, less creative development process. The future remains unclear, but one thing is certain: Xbox is entering a period of profound change – and the gaming world is watching closely.