Xbox announced sweeping layoffs on Monday, impacting approximately 1,600 employees, with a total of 3,200 job cuts planned by the end of the fiscal year. This wave of reductions includes divestments from four studios, and the future of a fifth, Arkane Studios, remains uncertain.
ZeniMax Media and its subsidiary Bethesda Softworks appear to have been disproportionately affected. While studios like Id Software and ZeniMax Online Studios were not shut down, they have sustained significant staff losses, according to reporting from Bloomberg's Jason Schreier.
The Elder Scrolls Online developer, ZeniMax Online Studios, has been described as "seemingly gutted" by a Kotaku report, with potentially up to half of its workforce being laid off. A community manager for the game indicated in a forum post that the future of The Elder Scrolls Online will be "shifting" following the launch of its Season One on July 8. The team plans to "evaluate the work in front of us and then lock down an updated schedule" to provide players with a clear timeline.
Following the release of its next Doom title, The Dark Ages, with the expansion Revelations on Tuesday, the future direction for Id Software is unclear, particularly in light of the recent layoffs.
Reports suggest that ZeniMax will now concentrate on its most prominent franchises: Doom, The Elder Scrolls, Fallout, Quake, and Wolfenstein. Bethesda is also set to alter its development strategy for future projects. In an internal email, Bethesda head Jill Braff stated that the company "will meaningfully evolve how we operate." Braff explained a shift away from a model centered on individual studio roadmaps to one that prioritizes "our strongest franchises and determining the content roadmap that best serves our players and Bethesda as a whole." The company will then align talent, technology, and resources to execute these priorities.
Notably, Starfield was not mentioned as a priority for Bethesda moving forward. The space-based RPG, which launched in 2023 to a mixed reception, has been played by over 15 million users in its first year, largely due to its inclusion on Xbox Game Pass. The game was also released on PlayStation in April 2026.
While new Starfield content is not indicated, Xbox expects Bethesda to focus on The Elder Scrolls and Fallout. The Elder Scrolls 6 has been in development for an extended period and is still anticipated to be years away. Xbox chief content officer Matt Booty recently provided a brief update, stating that the game "is coming along well" and will be announced and revealed "at the right time."