Microsoft's Xbox division announced on 6 July that 3,200 staff would be laid off throughout the financial year to 2027, with 1,600 roles eliminated immediately. The announcement, made via an email from Xbox chief executive Asha Sharma, described the move as the most significant restructuring in the history of Microsoft's console business.
Employees at studios, particularly in North America, were informed of their redundancy via virtual calls. Anne Barrett, laid off from Bethesda Game Studios Austin, described a two-minute meeting where she was told the news and warned about losing access to internal communication channels.
Affected staff at US studios will receive pay until 4 September, in compliance with the Worker Adjustment and Retraining Notification (WARN) act. Union representatives at Bethesda are currently in talks with Microsoft to negotiate severance packages and benefits, and are attempting to secure re-employment for some members.
The layoffs have led to concerns about the future of game development, with some staff claiming a lack of clear reasoning behind who was affected. Id Software, known for Doom and Quake, lost 136 staff, a majority of its workforce, while Bethesda also saw key staff affected.