Xbox Layoffs Live Report

Microsoft has announced what it has called “the most significant restructure in Xbox history.” Xbox CEO Asha Sharma has confirmed 1,600 Xbox staff will lose their jobs today, with another 1,600 set to be cut during the current financial year. As part of that, four studios are leaving Microsoft, and one may be sold or closed if it doesn’t find a buyer.

There is a lot of news flooding in around the Xbox layoffs, including staff, studio, and game changes. We’ll report on it all live right here. Keep refreshing for the latest updates on the likes of State of Decay 3, Senua, Marvel’s Blade, and the many staff who are working on them.

Head of ZeniMax Online Studios and Bethesda Game Studios email to staff

IGN has obtained the email Jill Braff, head of ZeniMax Online Studios and Bethesda Game Studios, sent to staff today following news of widespread layoffs at Xbox. While it doesn’t tell us much we didn’t already know, it reaffirms the idea that Bethesda, like the rest of Xbox, will double down on its biggest franchises.

Team,

I want to acknowledge the changes taking place across XBOX, including here at Bethesda, where a number of our colleagues have been impacted. Today’s news affects people who have worked alongside us, inspired us, challenged us, and helped build the studios, games, and culture that define Bethesda. Across our global organization, some employees are leaving the company, while certain countries review strategic options through processes required by local law. While each situation is different, what they share is uncertainty for people in our community.

I want to express my sincere gratitude to everyone who has been impacted. Your talent, creativity, dedication, and contributions have helped shape Bethesda in meaningful ways, and our immediate focus is supporting you through this transition. I also know this news is difficult for many across our organization, whether you’re personally impacted, supporting a teammate, or simply trying to process what comes next.

The intent behind today’s announced changes is consistent with the broader direction for XBOX: creating greater focus, improving execution, and positioning our business for long-term success. These shifts also reflect the realities of our industry and business – and our responsibility to ensure Bethesda is operating from a more stable foundation. To be successful in the future, we need to change course. We must strengthen our business, return to sustainable growth, and ensure we can continue investing in our franchises and our players. I know that doesn’t make a day like today any easier.

As we look ahead, we will meaningfully evolve how we operate. For decades, Bethesda has organized its business around the individual roadmaps of our largely independent development studios, supported by centralized publishing and corporate teams. This model enabled us to create some of the industry’s most beloved franchises. However, rising player expectations, increasing development complexity, and a more competitive market have changed the economics of our industry.

To best position Bethesda for future growth, we are shifting from a planning model primarily centered on what’s next for each independent studio to one that focuses on our strongest franchises and determining the content roadmap that best serves our players and Bethesda as a whole. From there, we’ll align the right talent, technology, and resources across the organization to deliver on those priorities. By working more closely across the organization, sharing expertise and capabilities, and focusing our investments on the opportunities with the greatest potential, we believe we can better support our franchises and IP with meaningful long-term potential.

This does not change the importance of exceptional creative work, craftsmanship, and innovation – which is what makes Bethesda special. Our studios’ and teams’ identities, talent, and expertise remain essential to our success. What changes is how we align those strengths, bringing them together around our franchises and IP, to position Bethesda for long-term growth and continued investment in our future.

We will share more about our direction in the weeks and months ahead. But for today, my focus is on the people who have made – and those who will continue to make – Bethesda what it is. Please take care of one another. Reach out to a colleague. Offer support where you can and give people the space they may need as they process today’s news.

Even during a challenging time, I remain confident in what we can accomplish together. We have extraordinary talent, some of the most beloved franchises in our industry, and tremendous opportunities ahead. The work we are doing now is about ensuring we are positioned to realize that potential for years to come. Thank you for everything you do for Bethesda, our players, and each other.

State of Decay 3 doesn’t have to launch on Xbox Game Pass under new owners

Game File has reported that State of Decay 3 doesn’t have to be released on Xbox Game Pass following developer Undead Labs’ sale to its mystery new owner. Xbox boss Asha Sharma’s email to staff confirmed “Ninja Theory and Undead Labs have entered terms to join new ownership with funding to complete and grow Senua and State of Decay 3.” Assuming both games are released, could they now skip Game Pass entirely? More here.

The Elder Scrolls Online forced to change roadmap

The Xbox layoffs have hit the Elder Scrolls Online development team at ZeniMax Online Studios, causing a change in the long-running MMO’s roadmap of content. Associate Director of Community, Jessica Folsom, posted in the game’s forum to say Season One will launch as planned, but beyond that, things have changed.

“Looking beyond Season One, the roadmaps we previously shared will be shifting,” Folsom said, without going into detail. “We want to take the time to evaluate the work in front of us and then lock down an updated schedule. While we’d love to share a concrete details today, stepping back to get our plans straight will let us come back to you with a clear timeline.

“This game is nothing without you, our community. Thank you for sticking with us, and for everything you bring to Tamriel.”

The message here is clear: the layoffs have forced a content rethink. According to Kotaku, staff are now concerned about the future of The Elder Scrolls Online with so few developers left to work on it.

Fans are worried about Starfield

According to a new report from Bloomberg, Microsoft’s restructuring of Xbox will see Bethesda focusing on a handful of franchises going forward: Fallout, The Elder Scrolls, Wolfenstein, Doom, and Quake. These five franchises are expected to be a priority, with at least three of them already having games in development. That doesn’t leave much room for more Starfield or Starfield 2, and fans of Bethesda’s sci-fi RPG are now worried it’s dead.

Xbox Is ‘Not Healthy,’ But Losing All of This Talent Isn’t the Cure

We also have an opinion piece from IGN Senior Editor Simon Cardy, who questions whether draining this much talent is really the way to cure Xbox. With multiple studios set to be jettisoned from its portfolio and left to fend for themselves, many avenues of creativity could soon be demolished, as Microsoft appears to be going all-in on a handful of decades-old “mega franchises” like Halo, The Elder Scrolls, and Call of Duty.

What’s happening with Marvel’s Blade?

As part of today’s announcement, Xbox boss Asha Sharma said Arkane’s management “is beginning required consultation with its Works Council to review potential strategic options.” As a French studio, Arkane must follow the country’s labor law around a potential sale or closure, and this process may take some time. Meanwhile, the future of Marvel’s Blade, which was in development at Arkane Lyon, remains unclear. Will it be released? Is it canceled? Could another company pick it up, with Arkane Lyon potentially continuing development? IGN has asked Marvel Games for comment. More on the situation with Blade here.

ZeniMax (Bethesda, id Software, MachineGames)

Bloomberg reporter Jason Schreier has said that while Microsoft-owned ZeniMax will suffer from today’s cuts, it won’t be left to work on Fallout and The Elder Scrolls only. Yes, Bethesda has The Elder Scrolls6 in the works, and the expectation is that there will be a focus on getting new Fallout games out the door. But ZeniMax studios will also work on Doom and Quake (id Software) and Wolfenstein (MachineGames). There’s no mention of Indiana Jones, however, which suggests MachineGames will not get the chance to work on a sequel to the well-received Indiana Jones and the Great Circle.

Double Fine and Compulsion Games

Double Fine and Compulsion Games have now issued public statements to confirm their status following word of today’s enormous cuts by Xbox, discussing their respective futures as independent studios. More here on the fate of the likes of Psychonauts and South of Midnight.

State of Decay 3

Asha Sharma has said Undead Labs will be sold “with funding to complete and grow” State of Decay 3, which suggests the game will be released eventually. But we don’t know who has bought the studio, and we don’t know if it will suffer any layoffs as a result. State of Decay 3 only appeared at the Xbox Games Showcase last month, where it had a new trailer with a 2027 release window.

Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.