Zenimax Online Studios, the developer behind The Elder Scrolls Online, has been significantly impacted by recent layoffs, with an estimated 60% of its workforce being let go between 2025 and 2026. This wave of dismissals, totaling 275 developers over the past 18 months, includes 213 employees laid off this week, occurring just days before the launch of the game's first new season under its updated seasonal model. The studio had previously weathered a major blow in July 2025 with the cancellation of Project Blackbird, a major MMO project in development for over five years. Despite these setbacks, developers expressed renewed enthusiasm and commitment to The Elder Scrolls Online, with executive producer Susan Kath and game director Nick Giacomini highlighting a team rally and excitement for the game's evolution.
Players have voiced dismay and heartbreak over the layoffs. Many cited the recent roadmap and quality-of-life improvements as reasons for returning to or engaging more deeply with The Elder Scrolls Online, only to see the teams responsible impacted. User comments from the Elder Scrolls Online subreddit and game forums reflect a sentiment that the game was regaining momentum, with players expressing shock and sadness at the scale of the cuts.
The Elder Scrolls Online has been a significant revenue generator for Microsoft, reportedly earning an average of $166 million annually over the past decade, totaling over $2 billion in lifetime revenue as of 2024. Critics argue that the continued layoffs are short-sighted and illogical, especially given the game's consistent profitability and its status as the primary new content in the Elder Scrolls franchise for nearly two decades. With The Elder Scrolls VI still a distant prospect, the burden of carrying the franchise falls heavily on Zenimax Online Studios.
The substantial reduction in staff raises concerns about the long-term quality and development trajectory of The Elder Scrolls Online. The article suggests that the layoffs are particularly egregious given Microsoft's significant recent investments in other areas, such as the acquisition of Activision Blizzard and investments in AI. The fate of the MMO genre, which is facing challenges within the current industry landscape, is also a concern, with The Elder Scrolls Online being a prominent title within it.