As Microsoft officially drops layoffs on Xbox in its biggest restructuring ever, developers from beloved studios are reacting with shock, frustration, and in the case of the Bethesda Game Studios Union, solidarity with employees being made redundant.
The BGS Union says it's tired of workers on the ground paying for the mistakes of the top-level executive suite, time and time again.
"In what is becoming a stressful annual routine, Microsoft has decided to lay off thousands, including MANY of us at Bethesda Games Studios. With over 10k developers already cut from previous rounds, those at the top have deemed that insufficient in fixing their mistakes," reads a Bluesky post from the workers union.
"Today we say goodbye to many of our friends and colleagues and to hundreds more across Xbox, including folks that have worked at Bethesda Games Studios for decades. When will this cycle of cuts in pursuit of ever-greater profits end?"
In an anticipated but nonetheless upsetting announcement, Xbox CEO Asha Sharma today revealed her big "reset" plan for Microsoft's long fledgling gaming branch: all in all, 3,200 jobs are being cut over the course of fiscal year 2027, 1,600 of which have been made immediately redundant.
Meanwhile, at least four studios are splitting off, with Compulsion Games and Double Fine going independent and Ninja Theory and Undead Labs entering "terms to join new ownership." Finally, the broadest overview of Xbox's big downsizing involves "potential strategic options" for Dishonored and Deathloop studio Arkane, words I'm sure are providing utmost comfort to the developers working there.
In her reasoning for Xbox's latest layoff blitz, Sharma points to weak operating margins, an overstuffed portfolio of AAA and indie studios and acquisitions that didn't pay off, and lower than expected returns on Game Pass and multiplatform investments.
Because of our One BGS union, we have the right to negotiate over the impacts of these layoffs, helping secure stronger severance packages and better support for those leaving the company. We will do everything we can to make sure our friends are properly taken care of.
— @bethesdaunion.bsky.social (@bethesdaunion.bsky.social.bsky.social) 2026-07-06T20:13:11.556Z
The question of when will enough truly be enough is on the minds of millions of game developers, journalists, and fans growing increasingly weary of studio closures, layoffs, and game cancelations in one of the most turbulent periods the games industry has ever faced. Although it can be hard to think of a major video game developer, publisher, or hardware manufacturer that hasn't seen cuts in the last few years, the latest 20% reduction in Xbox's overall workforce stands out as one of the most egregious in recent memory.
The workers being forced to leave Bethesda Game Studios are in the comparatively advantageous position of being protected by a union contract, which can often stipulate more favorable severance terms relative to a non-union job being made redundant – yet another argument for organized labor in the industry.
"Because of our One BGS union, we have the right to negotiate over the impacts of these layoffs, helping secure stronger severance packages and better support for those leaving the company," the union adds. "We will do everything we can to make sure our friends are properly taken care of."
