Microsoft's Xbox Layoffs Reshape ZeniMax, id Software, and ZeniMax Online as Focus Tightens on Big Franchises

Microsoft's latest round of layoffs has hit ZeniMax Media, the parent company of Bethesda Softworks, with cuts that impact id Software and ZeniMax Online Studios even as no studios are being closed entirely. Xbox CEO Asha Sharma described the workforce reduction as "the most significant restructure in Xbox history," according to GameSpot. Around 3,200 jobs are being cut before the end of fiscal year 2027, with the first wave of 1,600 layoffs already underway, Eurogamer reported.

2 sources

gamespotXbox Layoffs Hit Id Software And ZeniMax As Focus Shifts To Bigger FranchiseseurogamerAs ZeniMax also faces cuts, Xbox seeks a "significant overhaul" to focus on Fallout, The Elder Scrolls, Quake, and other big franchises

Bloomberg's Jason Schreier reported that ZeniMax will undergo a "significant overhaul" as Xbox shifts investment to "higher priority projects," as quoted by purexbox.com. That strategic pivot means Bethesda will now concentrate on established intellectual properties such as Fallout and The Elder Scrolls, while also keeping Wolfenstein and Doom in development despite the downsizing at id Software, according to Metro.

2 sources

purexbox.comReport: Bethesda to Undergo Major Restructuring Under Xbox, Prioritizing Key Franchises Like Fallout and Elder ScrollsMetroWolfenstein and Doom still in development despite Bethesda cuts confirms insider

"Though roadmaps are expected to shift as a result of the cuts."

kotakuXbox Layoffs Hit The Elder Scrolls Online Developer Zenimax Studios, Roadmaps to Shift

Kotaku noted that over 20 employees at ZeniMax Online Studios, the team behind The Elder Scrolls Online, have reported being laid off on LinkedIn, and the game's community manager stated that remaining staff want to "reaffirm our commitment" to the game. PC Gamer reported that while id Software and ZeniMax Online have survived the bloodbath, they have been "cut deeply," losing large portions of their workforces. GameSpot confirmed that a "significant" number of staff have been let go at those studios.

PC GamerBethesda Game Studios and ZeniMax hit hard by Xbox layoffs, says union

Microsoft plans to shed another 1,600 Xbox employees beyond the initial wave, with several studios being let go to find new owners or go independent, Eurogamer added. Asha Sharma framed the cuts as part of a shift in investment toward higher priority projects across Xbox's portfolio, which includes not only Bethesda and ZeniMax but also Blizzard, King, and Mojang, as trueachievements.com reported. The restructuring appears designed to narrow ZeniMax's focus to its most lucrative franchises, leaving the fate of smaller projects unclear.

trueachievements.comZeniMax restructuring to prioritize key franchises like Fallout and Elder Scrolls after Xbox layoffs