Update, July 7, 2026: Obsidian reportedly lost between 60 and 70 workers. A source told Kotaku that employees remaining at the studio “have not yet received any formal guidance” on how existing projects will move forward after the cuts.
Elsewhere, 3D Realms founder Scott Miller claimed that “most (if not all) of the programmers” from Id Software were laid off. The former project manager of Bethesda Game Studios, Jeff Gardiner, suspected that a total of 95 developers were lost at the studio.
Update, July 6th, 10pm UK: Posts on BlueSky and Linkedin suggested layoffs at Obsidian, developer of The Outer Worlds and Pentiment. Those affected include Daniel Alpert, an art director who has been with the company for 21 years, and writer AK Fedeau.
Other posts on LinkedIn support previous Kotaku reports of widespread layoffs at Zenimax Online Studios, including those focused on UX and usability, as well as other job losses at Id Software and Call of Duty developer Sledgehammer Games.
As PC Gamer points out, Obsidian is required to announce layoffs in advance if more than 50 employees are affected. However, at the time of writing, there is no reference to Obsidian in the California WARN Act Tracker, suggesting the cuts do not meet this threshold.
Update, July 6th, 6pm UK: A report in Kotaku describes “brutal” cuts at Zenimax Online Studios, which runs Elder Scrolls Online, and suggests that up to half of the development team could be affected. A post on the game’s forums said the studio is committed to the game, but “the roadmaps we previously shared will change.”
Original story, July 6, 2026: Details have emerged about the sweeping job cuts announced today by Xbox CEO Asha Sharma. Workers report job losses across the company’s studios and publishing teams.
The loss of 3,200 employees, around 20% of the organization, was announced this morning through an internal memo, also sent to Arkane Lyon has launched a consultation process in line with French labor law.
Subsequently, job losses at Bethesda were confirmed through employee posts on LinkedIn. Those affected include Piers Duplock, a producer at his studio in Montreal, Jean Paul Salman, a systems designer in Austin working on Fallout 76, and Jessica Clark, a community manager at his home base in Maryland.
Bloomberg reporter Jason Schreier said in a Bluesky post that Zenimax Online Studios and Id Software would also cut “a significant number of employees.”
The layoffs follow the company’s first round of voluntary layoffs, most of which took effect last week. The cuts coincide with the start of Microsoft’s fiscal year, meaning today’s news arrives almost exactly a year after the cuts were completed at The Initative and the canceled projects at Rare and Blizzard.
This is a developing story and will be updated.
https://www.gamesindustry.biz/xbox-layoffs-july-2026
