Key facts
- Xbox is laying off approximately 3,200 employees, representing about 20% of its workforce.
- The cuts are intended to refocus resources on major game franchises like Fallout and The Elder Scrolls.
- The company cited over-hiring during the COVID-19 pandemic and increased game production costs as reasons for the layoffs.
- Employees at ZeniMax Online Studios and ID Software were among those affected.
- Unionized workers are planning rallies to negotiate severance packages and discuss potential reinstatement.
Xbox workers have expressed shock and dismay following a significant round of layoffs that will impact approximately 3,200 employees, representing about 20% of the company's workforce. The cuts, described by some as a 'bloodbath,' are part of a strategic pivot by Xbox leadership to concentrate resources on its most popular and profitable game franchises, such as Fallout and The Elder Scrolls.
Xbox leadership, including CEO Asha Sharma, has stated that these 'painful' but necessary cuts are aimed at equipping the company for future success by focusing on its biggest titles and potentially accelerating new installments. This strategy shift comes after a period of aggressive expansion and over-hiring around 2020, fueled by the pandemic-induced boom in gaming. However, the rising cost of game production has put pressure on profitability.
Employees who lost their jobs, many of whom are members of unions affiliated with the Communication Workers of America (CWA), reported feeling blindsided and experiencing significant uncertainty in the weeks between initial memos and the actual layoffs. Developers at studios like ZeniMax Online Studios (ZOS) and ID Software, responsible for titles like The Elder Scrolls Online and Doom respectively, were among those affected. Some former employees claim the cuts have eliminated decades of valuable talent and experience, questioning the company's ability to achieve its stated goals.
Andrew Willis, a producer at ID Software, described the layoff of nearly 100 staff from the studio as devastating, particularly as they had recently completed a major expansion for Doom: The Dark Ages. He also claimed that many technical staff proficient in the studio's proprietary ID Tech engine were let go, a move he characterized as discarding valuable institutional knowledge.
In response to criticisms, Xbox stated that reports of the Texas team being wiped out were inaccurate and that they have 'dozens of people working on ID Tech across multiple locations.' The company did not directly address claims of extended work hours.
Unionized workers are planning rallies outside several Microsoft locations to initiate 'effects bargaining,' a process to discuss severance packages, potential job opportunities for laid-off staff, and arguments for reinstatement. Developers like Morgan Goin, who has experienced multiple rounds of layoffs in her 11-year career, expressed a desire for more sustainable, lifelong careers in the industry.