EVERYTHING
According to Pcgamer, Microsoft has executed a massive reorganization of its gaming division, leading to widespread job losses across several major properties. While the company officially announced the spinoff of four independent studios—Compulsion Games, Double Fine, Ninja Theory, and Unded Labs—internal reports suggest that the damage to established entities like Bethesda Game Studios and ZeniMax is substantial.
Significant impact on core franchises
Xbox CEO Asha Sharma confirmed that the company is making reductions across multiple units, including Activision, Blizzard, King, Mojang, and Xbox Game Studios. The restructuring aims to shift investment toward higher-priority projects, though the specific scale of cuts for each studio remains largely undisclosed by official channels.
Despite rumors that Bethesda might be pared down to focus exclusively on Fallout and The Elder Scrolls, industry insider Jason Schreier clarified that the publisher will continue to support other major IPs. However, the studios responsible for these titles are facing severe workforce reductions:
While these studios are not being shut down entirely, the loss of personnel marks a major shift in their operational capacity.
Union reports deep workforce losses
The Bethesda Game Workers Union issued a statement on Bluesky expressing frustration over what they characterized as a "stressful annual routine" of layoffs. The union noted that despite previous rounds of downsizing that eliminated over 10,000 developers, leadership continues to implement further cuts to satisfy profit targets.
"Today we say goodbye to many of our friends and colleagues, including folks that have worked at Bethesda Games Studios for decades," the union stated. The organization questioned when the cycle of pursuing ever-greater profits through staff reductions will finally conclude. This move highlights a growing tension between corporate restructuring goals and the preservation of long-term studio stability.
The ongoing reorganization reflects Microsoft's broader strategy to streamline its massive gaming acquisitions, potentially altering the development landscape for years to come.