Following yesterday’s public statement from Xbox CEO Asha Sharma to confirm massive layoffs across Xbox’s studios and business, reports on the extent of the job losses are now emerging. While four studios have been allowed to gain independence or new ownership, the studios remaining under Xbox leadership are being savaged by redundancies, some of which will make you question what their possible future could be.
Last night, reports emerged about id Software and ZeniMax Online, both being reduced by around half, with the idTech team effectively gone, and the future roadmap The Elder Scrolls Online now being reconsidered.
Obsidian has also been affected, it’s reported by Kotaku. Around 60-70 employees (roughly 25% of the studio) are being let go – this figure is possibly a bit high, as layoffs for over 50 employees would require a WARN filing which has not yet appeared. These layoffs are affecting producers, artists, designers, programmers, QA testers, writers, and others, and will surely hamper the studio’s ability to develop multiple games at the same time. We would expect that any smaller projects have now been cancelled, and in line with previous statement, the studio could shift to work with Bethesda on future Fallout and Elder Scrolls games.
The studio has been one of the most consistent studios under Xbox through this generation, regularly releasing games of varying sizes, though was forced to admit last year that the releases of Avowed and The Outer Worlds 2 had not met expectations (but also haven’t flopped completely). Work on Grounded 2 will continue, where the bulk of the work is being handled by Eidos Montreal, and work on The Outer Worlds 2 DLC is also expected to continue.
This is all part of the first set of layoffs that Microsoft has planned for Xbox through this financial year (ending on 30th June 2027). 1,600 employees have been let go, but a total of 3,200 are to be laid off. For the time being, it seems that Blizzard Entertainment teams and studios have been spared, but “further communications” will be coming on how they will be affected.
You can expect that morale will be in the toilet across Microsoft studios today. While Sharma might have had a point about a need to restructure the business and shift away from the smaller and indie studios that were acquired back in 2018, and deserves some credit for allowing several studios to continue to exist, the actual process of laying off staff feels like a simple case of spreadsheet balancing. Half of id Software, half of ZeniMax, 25% of Obsidian. They feel too arbitrary, and when that happens you lose a lot of valuable expertise and institutional knowledge.
Our thoughts go to those affected, and to those who are still at risk through the coming year.
