This week saw Microsoft and Xbox initiate the single biggest layoff wave in the gaming brand's history, with 3,200 Xbox and game development roles cut — 1,600 immediately, and another 1,600 throughout the next 12 months — as well as four studios divested from the Xbox Game Studios publishing division.

Alongside those teams and developers at ZeniMax and Bethesda, one studio that's been hit especially hard by the layoffs is id Software, the steward of the iconic and legendary shooter franchise DOOM. It's come to light that roughly half of the entire studio has been discharged, including both game devs and staffers working on its id Tech game engines.

Given the strong success of the DOOM 2016 reboot, DOOM Eternal, and last year's DOOM: The Dark Ages — which has a new Revelations DLC coming out today, one day after the cuts — the fact that id Software has been affected so significantly by the Xbox layoffs has come as a shock to many. Cuts to the id Tech team are surprising as well, as the studio's engine has historically run well and has been used for non-DOOM projects like the Wolfenstein games and Indiana Jones and the Great Circle.

That shock extends to id's developers themselves, many of whom have taken to social media platforms to express their astonishment and frustrations with the layoffs. One such employee, gameplay animator Skai Chow, has reacted to them with a scathing message for both Microsoft as well as for those "celebrating and worshipping" the cuts as a "move in the right direction."

"For my friends and followers who don't work in game development celebrating and worshipping that the layoffs yesterday were 'necessary for change and a move in the right direction'...I sure hope the sixth round of layoffs is worth our pain and your pleasure," wrote Chow. "After all, things are gonna be different this time around. Right?"

Chow's post features an image that highlights five previous rounds of Microsoft and Xbox layoffs that have come down since early 2023, including 10,000 cuts in January of that year, 1,900 discharges at the start of 2024, the closure of several ZeniMax and Bethesda studios in May that year, and The Initiative and several projects being shuttered in 2025. "We hope our pain was worth it," it's captioned.

The new Xbox CEO Asha Sharma contends that these latest cuts were a difficult but necessary move as part of a "reset" for the brand after it "overextended" with lots of expansion and "overly complex" internal systems.

Regardless of how true that ultimately is or isn't, I can't blame Chow or any other developer for feeling angry and bitter. Throughout the last four years, several thousand layoffs have wracked both Xbox and the wider gaming industry at large following overinvestment in gaming during the pandemic, resulting in extreme volatility and repeated devastating losses of talent.

I don't know what the right path forward is, especially with tariffs and the RAM crisis further complicating matters, but it's clear that the business as it is now isn't sustainable — and Chow is correct to highlight that layoffs haven't yet solved the problem. We can only hope for brighter times as Xbox and the industry reorganize.

Do you believe Microsoft and Xbox have gone too far with the layoffs at id Software? Share your thoughts below, and vote in our poll.

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A massive wave of 4,800 layoffs hit Microsoft on Monday morning this week, with 3,200 of the cuts aimed at Xbox specifically for a "reset" of the firm's gaming business. The restructuring has seen countless game developers let go as well as four studios divested from Microsoft, and individuals working on the Xbox platform itself have been affected as well.

One such staffer is Kevin LaChapelle, Microsoft's vice president of Xbox Platform In a LinkedIn post on Tuesday morning, LaChapelle shared that "I will add my name to the list of people who were laid off today at Xbox," bringing an end to his lengthy 37-year tenure at the company.

LaChapelle has overseen development of Xbox platform software "across cloud, console, and PC" since 2023. Before that, he led the creation and advancement of Microsoft's Xbox Cloud Gaming service (previously known as xCloud), and before that he led the team of engineers that built the fan-favorite Xbox Backwards Compatibility Program.

Ever since it was unveiled at E3 2015 during what I'd say is indisputably one of the best moments in Xbox history, Xbox Backwards Compatibility — a feature that lets you play hundreds of Xbox 360 games and even some original Xbox titles on Xbox One or Xbox Series X|S through an emulation layer — has been a colossal hit with fans.

At the time of its release, it also gave the fairly unpopular Xbox One a notable edge over Sony's PlayStation 4 at a time when it sorely needed one. Longtime Xbox gamers were still able to enjoy a rich library of titles from past systems on the latest console natively, whereas the PS4 was incompatible with games made for older PlayStation consoles.

I can't stress enough that the impact LaChapelle has had on Xbox has been huge — and that makes the news he's been laid off all the more upsetting to hear, especially since the Backwards Compatibility Program he led has been revived this year, with many speculating the feature will be overhauled to work with Microsoft's upcoming PC-console hybrid system Project Helix.

"I will add my name to the list of people who were laid off today at Xbox. This ends my 37 years at Microsoft. I have worked in many different parts of the company, and I will say my fondest memories are of leading the team of very talented engineers who built the Xbox Backward Compatibility program," he wrote in his post. "Sitting in the auditorium when [Phil Spencer, former Xbox CEO] announced the program at E3 2015 was incredible. The audience's reaction was unbelievable."

"I followed that with leading the team who created our Cloud Gaming product. I am a firm believer that all entertainment will eventually become streamed to you wherever you are," LaChapelle added. "I look forward to watching how Xbox evolves going forward and I wish the team nothing but success."

Ultimately, I'm very sad to see LaChapelle cut from Microsoft and Xbox, and I hope that he's able to land a new position somewhere soon. I extend that sentiment out to everyone impacted by these mass layoffs that have added to an already-devastating total that's been growing since 2022.

How important is the Xbox Backwards Compatibility Program that LaChapelle led the development of to you? What about Xbox Cloud Gaming? Let me know in the comments, and vote in our poll as well.

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To say that times are difficult for developers under the banner of Microsoft and Xbox would be an understatement. On Monday morning, the publisher initiated a mass layoff wave of 4,800 cuts throughout the firm, with a whopping 3,200 of them — 1,600 now, and 1,600 over the course of the next 12 months — hitting the Xbox division and its studios.

The layoffs are very widespread and are affecting all of Xbox's development teams, with four in particular being divested and Marvel's Blade dev Arkane Lyon also reportedly at risk of closure or being split off from Microsoft. Some groups have also been hit considerably harder than others, and one of these appears to be the developers at ZeniMax and Bethesda, the stewards of Fallout, The Elder Scrolls, DOOM, and other major Xbox properties.

A Bloomberg report suggests ZeniMax and Bethesda have been hit "significantly" by the cuts, and that their studios "will face a significant overhaul" as they pivot to focus on core IPs like Wolfenstein, Quake, and the aforementioned franchises.

In response to the massive surge of layoffs, the official labor union of Bethesda Game Studios has voiced frustrations with the reduction in force on social media. I think it best if you read its message in full, so I've both copied and embedded the complete thread below:

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?

— @bethesdaunion.bsky.social (@bethesdaunion.bsky.social.bsky.social) 2026-07-06T21:29:27.360Z

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.

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?

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.

— Bethesda Game Studios Union

The union's strongly critical comments bring cuts from the past several years to mind, referencing other waves of mass layoffs that have struck Microsoft and Xbox such as 10,000 in 2023, additional cuts in early 2025, and last year's infamous game cancelations and closure of The Initiative that came with 9,000 additional discharges across the firm's workforce.

These new layoffs are the latest in a brutal series of cuts that have plagued the gaming industry since 2022, with game publishers worldwide dismissing countless developers after overinvestments in gaming during the pandemic and amid economic challenges such as the onset of tariffs and the ongoing memory and hardware crisis caused by AI.

Xbox's new CEO Asha Sharma has said that Microsoft has "overextended" with Xbox, leading to the current situation in which layoffs like these represent "necessary changes." Bethesda's union seems to disagree, but either way, it's heartbreaking to see so many developers that build the games we love get their lives upended by massive corporate reorganizations like this one.

As I've written so many times before covering layoffs like these, I sincerely hope that everyone affected is able to find new and stable work as quickly as possible, and that they're given proper severance packages and ample support.

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Microsoft and Xbox CEO Asha Sharma announced a massive restructuring for the gaming brand on Monday morning, with reports indicating that 1,600 roles have been cut immediately with another 1,600 layoffs planned throughout the next 12 months. In total, 3,200 Xbox staffers will be affected, with 4,800 cuts in total hitting Microsoft overall.

These reductions are coming across the entirety of the Xbox Game Studios publishing wing, though some studios will be affected more than others. Notably, though, Compulsion Games (South of Midnight), Double Fine Productions (Psychonauts, Keeper, Kiln), Ninja Theory (Hellblade, Senua), and Undead Labs (State of Decay 3) are all splitting off from Microsoft entirely (though thankfully, they're not closing and their work-in-progress projects will remain in development).

Reportedly, another group of developers that's been hit particularly hard by the layoffs are the teams at Bethesda and ZeniMax, known for their work on legendary franchises like Fallout, The Elder Scrolls, DOOM, Wolfenstein, and Quake.

According to Jason Schreier of Bloomberg, ZeniMax/Bethesda "will face a significant overhaul" as a result of these cuts, and will be driven to focus on the aforementioned IPs that stand as its "biggest franchises." It's notable that it won't only work on Fallout and The Elder Scrolls, though, as I've noticed lots of recent rumors suggested that might be the case.

Many of those rumors stemmed from a report in which it was said Sharma wants Xbox to "move faster" with its core franchises, with Fallout and The Elder Scrolls directly named alongside Halo.

"ZeniMax will be impacted significantly by the reorganization but will NOT be reduced to only Fallout and The Elder Scrolls, despite rumors over the last few weeks," Schreier wrote in a post on Bluesky. "The publisher will also still work on Wolfenstein, Doom and Quake."

It's worth noting that the fate of one ZeniMax team, Arkane Lyon, is currently unclear. Arkane is developing Marvel's Blade, which has reportedly been delayed and is "running over budget." We've previously reported that Microsoft is negotiating with the French government to figure out a path forward for the studio and avoid closure while hopefully also keeping the game alive, but that's all we know for now.

In 2024, Microsoft and Xbox shuttered ZeniMax/Bethesda developers Arkane Austin (Prey, Redfall), Alpha Dog Games (Mighty Doom), and Tango Gameworks (Ghostwire: Tokyo, Hi-Fi Rush), with PUBG's Krafton stepping in to save the latter studio from the axe.

I'm glad that ZeniMax/Bethesda will still be able to explore new projects for its big properties outside of behemoth franchises like Fallout and The Elder Scrolls, though the situation with Arkane and the layoffs overall are still terribly unfortunate. Developers that have worked together in these teams for years and years are being let go, further adding to the devastating number of 2022-2026 video game cuts we've already seen.

Notably, The Elder Scrolls Online's content roadmap is "shifting" due to layoffs at ZeniMax Online Studios. Bethesda Game Studios, meanwhile, remains focused on The Elder Scrolls 6 as far as we know, which is still "a long ways off."

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Several weeks after Xbox admitted it's "overextended" with its business and it was reported that Microsoft would begin "major layoffs" in July, those cuts have now begun to hit the firm. In total, 4,800 roles are being eliminated, with 3,200 of them — roughly 67% — being Xbox game dev positions.

Amid the mass layoffs, Xbox CEO Asha Sharma has addressed the situation in a letter to staff that was also shared publicly, writing that the Xbox team's reduction is a painful but ultimately necessary step in working to "reset" the brand.

Notably, Sharma also revealed that she'll now have direct oversight over Minecraft developer Mojang Studios as well as Candy Crush maker King; both games have "increasingly become platforms and are our largest by monthly active players." She also says that "They bring critical geographic, demographic, and differentiation to Xbox."

Though Sharma didn't mention any specific plans for Mojang and King moving forward, a new report from Game File notes that according to a source familiar with Microsoft's plans, the new CEO feels that Xbox and the company have "massively underinvested" in Minecraft, and wants to correct this.

Game File's source explained that about six years ago, Minecraft's size and popularity was on par with Roblox, the widely available free-to-play platform for community-made games and content. Since then, however, it's estimated that Roblox has invested in its growth roughly five times as much as Microsoft has in Minecraft's, and that Minecraft's success has gone towards funding other Xbox projects instead of its own further success.

Minecraft, though still enjoyed by droves of players worldwide, has — along with countless other titles and platforms — been eclipsed by Roblox. In 2025, it grew so large that it surpassed the player engagement of Steam, PlayStation, and Fortnite combined, and was responsible for a whopping 67% of the gaming industry's total growth last year.

A specific reason for why King and the Candy Crush team will now directly report to Sharma as well wasn't reported, though I imagine it's because Candy Crush, like Minecraft, has lost ground to Roblox's rise to domination. After all, Roblox competes directly with the legendary mobile game since it's available to play on iOS and Android.

I don't play Candy Crush and can't speak to how well it's been maintained, though I've long held the view that Minecraft's live-service support is rather poor, with meaningful additions to the sandbox survival game coming far too slowly. Perhaps with Sharma's stewardship, that will change.

I'm confident one area of focus for the Xbox CEO will be reinforcing Minecraft's more social aspects, given her own background developing social platforms like Messenger. It's worth noting that this spring, Mojang announced that Minecraft: Java Edition will soon get a Friends List and peer-to-peer support, both of which are features that will make multiplayer easier and more convenient to engage with.

Do you believe Asha Sharma will successfully help Minecraft (and Candy Crush) grow and improve moving forward? Let me know what you think down below, and in our poll.

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