By
Kenneth ShepardPublished July 9, 2026
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The lasting effects of Xbox’s most recent mass layoffs are impossible to measure right now. The numbers alone don’t encapsulate how much institutional knowledge teams could be losing. StudioslikeDoomdeveloper id SoftwareandAvowedstudio Obsidianare trying to pick up the pieces after losing large swaths of their coworkers. At Bethesda, which has been quietly working onThe Elder Scrolls VI, members of the team say that game’s already fraught development is going to take a hit after these layoffs.
IGNspoke to several folks at Bethesda about the layoffs, and they paint a pretty grim picture of things at the storied RPG studio. They say the loss of developers across multiple disciplines will have a “substantial and cascading effect” on both the development ofElder Scrolls VIand the morale of the team. They claim there is also now a fear within Bethesda that many of those colleagues who lost their jobs are going to be backfilled by developers who aren’t experts in the company’s proprietary tech.
“There is a fear that we are going to be replaced by cheaper, contracted labor, or we will hire folks to replace them that will need to be onboarded (our tools are proprietary, other devs aren’t going to know how they work) resulting in more delays, and we’ll need to crunch to make up the time,” one Bethesda developer toldIGN
The Elder Scrolls VIwas announced in 2018, and Bethesda has repeatedly said that it announced the game too early and fans shouldn’t be expecting frequent updates on the state of its production. But now some developers say there’s a genuine concern thatthe timeline the team was operating onjust weeks ago may no longer be feasible without the people lost in Xbox’s latest cuts. Even games that are already out likeFallout 76will suffer after the cuts.
“I’ve heard from my colleagues that they’re already being asked to train new contractors,” a developer toldIGN. “I have no idea how they’ll continue updatingFallout 76without hiring an external studio.”
Though some of Bethesda’s employees were reportedly told they would be safe from the next planned wave of layoffs happening later this year, no one is feeling stable under the company’s umbrella after years of annual cuts
“The ‘survivors’ were told they’re safe from those next 1,600 but it’s not entirely reassuring,” a laid-off staff member concluded. “Even if that’s true, who’s to say there’s not another 1,600 next year after that? It’s had the chilling effect of realizing you don’t get to retire off your work at Xbox. Your time ends when you quit or are laid off, that’s it.”
Xbox acquired Bethesda and its various studiosin 2021as part of an acquisition spree that saw Microsofteating up several companies, big and small, many of which are being impacted in some way by the current layoffs. That includes several studios that are now being spun off, likeDishonoreddeveloper Arkane, which isreportedly in talks to be divested from Microsoft
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