Xbox Layoffs: Elder Scrolls VI Delay & Bethesda Crunch

Xbox’s latest round of layoffs is already reverberating through Bethesda Game Studios, with multiple current and former employees warning that the staffing cuts are likely to ripple directly into the long-awaited development of The Elder Scrolls VI—and could worsen workplace conditions across the studio.

Key takeaways

Bethesda Game Studios staff say the layoffs are removing more than 50 people tied to The Elder Scrolls VI.
Employees describe a morale hit, a higher chance of crunch, and concern that The Elder Scrolls VI may slip further.
Bethesda workers shared photos of memorial displays inside offices in Dallas, Texas, and Rockville, Maryland, with at least one later taken down by HR.
Bethesda Games Studio Union is pushing awareness via the Xbox Player Voice feedback system, where the post reached the top 20 suggestions.
The cuts are part of a broader Xbox restructuring led by newly installed CEO Asha Sharma, described internally as the most significant reorganization in Xbox history.

Layoffs, morale, and memorials inside Bethesda

Multiple Bethesda staff members claim that job losses across Bethesda Game Studios locations have eliminated over 50 employees, including “key, high-performing” workers involved in building the next Skyrim-style entry. Employees who spoke about the situation requested anonymity to avoid further risk to their careers.

Those staff members say the impact goes beyond headcount. They describe shattered morale, an increased likelihood of crunch during the production stretch, and a growing chance that the game’s already distant completion timeline will extend even further.

Within the tightly knit Bethesda environment, the emotional response has spilled onto social media. Workers posted images of improvised “Celebrations of Service” memorials set up around the studio, including framed pictures of laid-off coworkers displayed in common areas with bouquets of flowers. These displays were shown in Bethesda offices in Dallas, Texas, and Rockville, Maryland, though at least one has since been removed following orders from the company’s human resources department.

One Bethesda employee summarized the situation by saying the loss of staff would have a “substantial and cascading effect” on both the project and the studio’s morale. Another described the layoffs as touching “every discipline,” naming programmers, artists, and designers. A further comment highlighted the end of employment for someone who had been at the company since Morrowind.

How fans are reacting and what Xbox’s restructuring means

As the layoffs hit, the Bethesda Games Studio Union has pointed to a post on the Xbox Player Voice feedback platform. The post is aimed at highlighting the scale of job losses and signaling to Microsoft that fans are unhappy with layoffs connected to the hobby and communities around Xbox gaming. With 2,588 upvotes, the submission reportedly climbed into the top 20 Xbox user suggestions on the site, which Microsoft uses as a channel for fan input tied to platform decisions.

These cuts are part of a broader downsizing at Xbox. The company reportedly laid off 1,600 employees this week, framed internally as part of a harsh business reduction under CEO Asha Sharma, who was recently installed. In an email to staff, Sharma characterized the move as the most “significant” restructure in Xbox history and argued that Microsoft’s gaming business “is not healthy.” Overall, Xbox is reportedly cutting about one-fifth of its workforce as part of Sharma’s push for growth.

Another 1,600 departures are expected later this year as Xbox seeks to become leaner and focus more heavily on its biggest brands, including Halo, Forza, Fallout, and The Elder Scrolls. Still, Bethesda employees believe the changes will continue to harm The Elder Scrolls VI development.

After Sharma’s message, Bethesda boss Jill Braff sent her own email to the studio. In it, she said the layoffs and strategic shift reflect “the realities of our industry and business” and Bethesda’s responsibility to operate from a more stable foundation.

Braff also argued that the company needs to “change course,” strengthen its business, return to sustainable growth, and maintain the ability to invest in franchises and support players. She added that the day’s news would not be made easier by those goals, and said Bethesda teams would now collaborate more closely and concentrate on the company’s “strongest franchises” to better serve “our players and Bethesda as a whole.”

Wider shakeups across Microsoft’s studios

Coverage has already explored how the new approach could reshape Bethesda-adjacent development. The focus on major franchises is expected to leave other projects in a weaker position. Plans involving The Elder Scrolls and Fallout are described as more central, while Starfield may face uncertainty.

There are also claims that Microsoft’s intent to sell or close Arkane Lyon could put Marvel’s Blade in jeopardy, pushing it toward cancellation or a different publishing path. Meanwhile, The Elder Scrolls Online studio ZeniMax Online Studios has already signaled content roadmap changes tied to the layoffs and reduced staffing.

Other studios have reportedly taken major cuts as well. id Software, known for the Doom series, is described as having suffered significant staffing reductions. MachineGames has reportedly endured the round of cuts, with a new Wolfenstein title described as “pretty much an open secret.” However, employees and observers say it is becoming increasingly unlikely that Indiana Jones and the Great Circle will receive the sequel that was teased at the end of the game.

Every IGN Elder Scrolls Review

Why The Elder Scrolls VI is the center of concern

The Elder Scrolls VI remains one of the most anticipated games on Xbox’s upcoming slate, potentially even the most anticipated. But the same production uncertainty created by the layoffs is also feeding player concerns about what happens next in development.

One Bethesda developer described a fear that the studio could be replaced by cheaper contracted labor, or that new hires brought in to fill gaps would need onboarding. The developer pointed out that Bethesda tools are proprietary, and external teams may not know how those systems work, potentially creating delays and forcing crunch to recover schedule. Another staff member said the studio has been extremely excited about TES 6, but the situation has had a crushing effect on morale.

They added that Bethesda was already running a tight operation and are worried the current disruption could delay the game, even though a final release date had not been selected as far as they knew.

This week’s reporting also claimed that The Elder Scrolls VI is still at least two years away from launch, despite being announced roughly eight years earlier. In the meantime, Bethesda released Starfield, but fans have faced frustration due to the long gap since the last mainline Skyrim-type follow-up. That wait is compounded by the idea that the franchise has skipped an entire console generation for its core releases.

Outsourcing, staffing gaps, and shifting support teams

Employees say the company may be trying to replace lost talent with outsourcing. One staff member referenced a similar situation in Bethesda’s “decimated” QA department, where work previously done by internal employees has reportedly been taken on by overseas staff working through the outsourcing firm Keywords. That staff member said colleagues have already been asked to train new contractors. They also questioned how Bethesda would continue updating Fallout 76 without bringing in an external studio.

Another claim is that ZeniMax Online Studios (ZOS) will fill gaps on the Elder Scrolls VI development team. However, it remains unclear how that arrangement could work, given that public layoff notices reportedly show ZOS itself has been heavily reduced, with 212 employees laid off. Other teams within the wider ZeniMax family are also described as having been gutted.

Elsewhere, additional layoffs were described by industry reporting. Game Developer is cited as saying 136 of 185 full-time employees were laid off from id Software. Outside Bethesda, Bloomberg’s Jason Schreier was said to have reported that Obsidian Entertainment laid off a quarter of its staff. Obsidian is then described as being tasked with work on a new Fallout game, with Bethesda reportedly helping out.

“Survivors,” permanent uncertainty, and what comes next

One Bethesda worker said the “specter of layoffs” is something employees will likely face indefinitely until the studio unionizes. Another staffer reported that “survivors” were told they were safe from CEO Sharma’s further 1,600 cuts planned for this year, though they still expressed deep concern that the downsizing could continue beyond the current round.

A laid-off employee added that even if the “survivors” message is accurate, it is not reassuring. They argued that it raises the question of whether another 1,600 cuts could arrive next year. The staff member said the chilling effect comes from realizing that there is no retirement security through employment at Xbox—your time ends when you quit or when you are laid off.