Xbox is undergoing a significant restructuring that will result in layoffs affecting roughly 20% of its workforce throughout the current fiscal year. Described by Xbox boss Asha Sharma as "the most significant restructure in Xbox history," these changes will touch various parts of the business, including prominent development studios such as Id Software and ZeniMax Online Studios.
While these studios will not be shuttered, reports indicate substantial reductions in personnel. According to Bloomberg's Jason Schreier, a "significant" number of employees have already been let go as part of an initial wave of 1,600 layoffs, with Microsoft planning to eliminate an additional 1,600 roles in the coming months. Jeff Gardiner, CEO of Something Wicked Games and former project lead at Bethesda Studios, stated that Id Software has lost 95 employees, and Bethesda Game Studios has laid off 35 workers.
In an open letter, Sharma indicated that Xbox will be prioritizing higher-priority projects across its studios, including those under the Bethesda and ZeniMax umbrellas. Schreier reported that these studios will continue to develop established franchises like Fallout and The Elder Scrolls, alongside other intellectual properties such as Wolfenstein, Doom, and Quake.
Sharma also stated that no first-party, publicly announced games or projects will be canceled as a direct result of these reductions. Titles like InXile Entertainment's Clockwork Revolution and The Coalition's Gears of War: E-Day remain on track, as do Senua and State of Decay 3 from Ninja Theory and Undead Labs, respectively. The future of these games could evolve once new ownership takes effect at the departing studios. Additionally, the status of Arkane Studios' Marvel's Blade remains uncertain at this time.