Bethesda has been significantly impacted by recent Xbox layoffs, with notable reductions in staff at Bethesda Game Studios, id Software, and ZeniMax Online Studios. A WARN Act notice indicates a total of 379 employees were laid off from ZeniMax Online Studios and ZeniMax Media Inc., with an additional 96 staff cut from id Software and 40 remote roles eliminated. While specific project assignments for affected employees are difficult to pinpoint due to blended teams, these numbers represent substantial workforce reductions.
These layoffs are part of a larger Xbox restructuring plan that will see 1,600 employees lose their jobs in total. New Xbox CEO Asha Sharma's strategy emphasizes increased collaboration among studios and a focus on major franchises like Halo, Minecraft, Candy Crush, Fallout, and The Elder Scrolls. Bethesda boss Jill Braff stated in an internal memo that these changes are necessary to ensure the company operates from a more stable foundation and to return to sustainable growth. The company is shifting from a studio-centric planning model to one that prioritizes its strongest franchises and aligns talent and resources accordingly.
The Elder Scrolls 6 Development Uncertainties
Staff at Bethesda Game Studios have expressed concerns that the Xbox layoffs will have a significant and cascading effect on the development of The Elder Scrolls 6. Reports suggest that morale has suffered, with fears of future development crunch and potential delays. The Elder Scrolls 6, announced in 2018, is reportedly still at least two years away from release. Developers worry about being replaced by contract labor or the need to onboard new staff unfamiliar with proprietary tools, which could lead to further delays. The BGS union, OneBGS, is organizing protests to negotiate the impact of these layoffs on staff and working conditions.
Despite these concerns, a source familiar with Bethesda's restructure expressed confidence in Bethesda Game Studios' continued ability to develop The Elder Scrolls 6, stating that the studio's plans and ambitions for the RPG remain unchanged. The game is currently said to be on track, though its release remains distant.
Fallout Franchise Expansion Amidst Restructuring
The Fallout franchise appears poised for an expansion, with reports indicating that Obsidian Entertainment, the developer behind Fallout: New Vegas, is working on a new Fallout game, supported by Bethesda. This move aligns with Xbox CEO Asha Sharma's goal to accelerate development on major franchises. Several Fallout projects are reportedly in development, including Fallout 5, which Bethesda development chief Todd Howard has confirmed will follow The Elder Scrolls 6 and will incorporate canon events from the recent Fallout TV series. The live-service game Fallout 76 continues to be a significant operation with hundreds of developers, and Fallout Shelter also remains active. Amazon's Fallout TV show is also progressing, with Season 3 currently filming.
Impact on The Elder Scrolls Online and Starfield
The Elder Scrolls Online has been directly impacted, with its development roadmap being altered as a result of the layoffs at ZeniMax Online Studios. While the exact number of affected staff is unclear, concerns persist regarding the fate of remaining employees and the game's future. ZOS is reportedly supporting ESO's new season model and exploring closer collaboration with Bethesda Game Studios to support the broader Elder Scrolls franchise.
Fans have noted the absence of Starfield from Bethesda's stated priorities following the layoffs. Although the game did not fully meet initial player expectations, its development roadmap for updates and content remains unchanged, with a Nintendo Switch 2 version reportedly in development. The exact nature of future Starfield content remains unspecified.
Arkane's Blade and id Software's Future
Arkane Lyon, the studio behind Deathloop, is undergoing a consultation process regarding its future, with hopes that a buyer will be found, potentially allowing Marvel's Blade to be released. Prior to the layoffs, Blade was reportedly on track for a reveal next year and a Q4 2027 release.
Doom developer id Software stated that it is now at a similar staffing level to when it developed the 2016 Doom reboot and remains capable of creating "great games." Xbox confirmed that dozens of employees are working on the id Tech engine across multiple locations, countering earlier reports of minimal staffing. The studio is prototyping several potential projects, including new original IPs and multiplayer concepts.