Xbox layoffs: Jobs lost at Obsidian, Bethesda, Id and Zenimax Online Studios
Microsoft’s latest Xbox restructuring has turned into a broad studio-level downsizing, with layoffs confirmed across Obsidian, Bethesda, id Software and ZeniMax Online Studios. The company announced 3,200 job losses, roughly 20% of the organization, alongside divestments and studio transitions that will ripple through active projects.
The clearest numbers so far point to 52 layoffs at Obsidian, 158 at id Software and Bethesda Game Studios in Austin combined, and 213 at ZeniMax Online Studios and ZeniMax Media in Maryland. The affected roles are spread across the pipeline: QA, production, systems design, community, UX/usability, art direction and engineering have all been hit, which usually means schedule risk as well as immediate staffing gaps.
For developers, the practical concern is continuity. ZeniMax Online has already said Elder Scrolls Online roadmaps will shift, while workers at Obsidian say remaining staff still lack formal guidance on how current projects will move forward. The cuts also arrive just as Microsoft’s financial year begins, echoing last year’s round that closed The Initiative and cancelled projects at Rare and Blizzard.
“The roadmaps we previously shared will be shifting.”
- what
- Microsoft/Xbox cut 3,200 jobs, about 20% of the organization, with layoffs across multiple first-party studios.
- who
- Affected studios include Obsidian, Bethesda Game Studios, id Software, ZeniMax Online Studios and ZeniMax Media.
- when
- The layoffs were announced July 6, 2026, with WARN notices and follow-up confirmations on July 8-9.
- impact
- Confirmed cuts include 52 at Obsidian, 158 at id/Bethesda Austin, and 213 at ZeniMax Online/ZeniMax Media, with QA, production, design and engineering affected.
Large layoffs and project disruption across major studios
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