Xbox Layoffs Hit Obsidian, id Software, and ZeniMax Online Studios

Xbox’s latest round of layoffs has reportedly hit several major Bethesda and Xbox studios, even though none of the affected teams will fully shut down. The cuts have raised new questions about how Microsoft plans to manage some of its most important game franchises while reducing staff across internal teams.

Obsidian Entertainment appears to be one of the biggest names affected by the layoffs. The studio has released several games since joining Xbox in 2018, including The Outer Worlds, Grounded, Pentiment, Avowed, and The Outer Worlds 2.

Kotaku reports that Obsidian is losing around 25% of its staff, with cuts affecting quality assurance, artists, writers, programmers, producers, and other departments. Work on Grounded 2 and future The Outer Worlds 2 DLCs will reportedly continue, but the scale of the layoffs has created concern about the studio’s long-term project plans.

id Software Also Faces Major Cuts

id Software, the legendary studio behind DOOM and Quake, has also reportedly been hit by significant layoffs. The studio is not closing, but reports suggest that the team has lost a major number of staff members, including people from its coding team.

That raises concern about id Software’s future role inside Xbox. Reports suggest the studio may become more of a support team for future DOOM, Quake, and Wolfenstein projects, while MachineGames could take a larger creative role on those franchises.

Elder Scrolls Online Roadmap Will Change

ZeniMax Online Studios has also confirmed that its plans for The Elder Scrolls Online will shift after the latest cuts. The team said its immediate focus remains on launching Season One, but it will now review its upcoming work before sharing an updated schedule.

This is notable because The Elder Scrolls Online remains one of Xbox’s most successful live-service games. Even so, the layoffs show that strong performance has not protected every team from Microsoft’s wider restructuring plans.