--- title: Microsoft's Xbox layoffs: id Software, Obsidian, and the... description: Microsoft's latest Xbox restructuring eliminated approximately 3,200 roles across its gaming division, with id Software losing roughly two-thirds of its Doom... canonical: https://daily.dev/posts/microsoft-s-xbox-layoffs-id-software-obsidian-and-the-industry-fallout-iwttd2sto twitter:card: summary_large_image twitter:site: @dailydotdev og:type: website og:site_name: daily.dev og:title: Microsoft's Xbox layoffs: id Software, Obsidian, and the industry fallout | daily.dev og:description: Microsoft's latest Xbox restructuring eliminated approximately 3,200 roles across its gaming division, with id Software losing roughly two-thirds of its Doom... og:url: https://daily.dev/posts/microsoft-s-xbox-layoffs-id-software-obsidian-and-the-industry-fallout-iwttd2sto og:image: https://api.daily.dev/og/posts/IwTTd2STO.png og:image:alt: Microsoft's Xbox layoffs: id Software, Obsidian, and the industry fallout og:image:width: 1200 og:image:height: 630 og:locale: en --- > ## Documentation Index > Fetch the complete documentation index at: https://daily.dev/llms.txt > Use this file to discover all available pages before exploring further. # Microsoft's Xbox layoffs: id Software, Obsidian, and the industry fallout **[Collections](https://daily.dev/sources/collections)** · 4 min read · 15 upvotes · 1 comments ## Summary Microsoft's latest Xbox restructuring eliminated approximately 3,200 roles across its gaming division, with id Software losing roughly two-thirds of its Doom (2016) developers, ZeniMax Online Studios losing its entire top leadership, and Obsidian Entertainment being redirected away from new IP toward major franchises like Fallout. Industry insiders are speaking out: id Software producer Andrew Willis publicly criticized large publishers as poor stewards of the industry, arguing monopolistic structures prevent future landmark franchises and advocating for developer-owned studios. Obsidian director Brandon Adler pushed back on claims the studio has lost its identity, noting key creative leads remain. Labor unions in the US and Canada filed unfair labor practice charges against Microsoft, protests were held at Redmond, and worker support organizations mobilized for affected employees. The cuts reflect a broader structural shift in the games industry, with physical game sales declining and veteran developers exiting the field. ## Content ## The layoffs and what followed Microsoft's latest round of Xbox cuts eliminated roughly 3,200 roles — about 20% of Xbox's workforce — and the fallout has been messy. Protests were held outside Microsoft's Redmond headquarters. ZeniMax Online Studios lost its top leadership, including studio head Joe Burba and ESO executive producer Susan Kath. Dead Space co-creator Glen Schofield retired from game development entirely. The IWGB Game Workers union put together a redundancy taskforce for affected workers, and the Writers' Guild of Great Britain released a free contract guide for video game writers, which feels like a small but real response to a chaotic situation. ## Union charges against Microsoft The Communications Workers of America and CWA Canada filed unfair labor practice charges with the National Labor Relations Board against Microsoft, Xbox, ZeniMax, id Software, and Bethesda Game Studios. The core allegation: Microsoft laid off thousands of employees without notifying or bargaining with recognized unions, which is legally required when collective agreement negotiations are active. The specific charges include repudiation of contract, refusal to furnish information, bad faith bargaining, and coercive surveillance. Bethesda Game Studios union members went on strike in response. Microsoft said it has reached out to begin "effects bargaining" and is committed to supporting impacted employees. That framing — bargaining about the effects of a decision already made, rather than before it — is exactly what the unions are contesting. ## Bethesda Montreal: minimum severance, benefits cut immediately The unionized Bethesda Montreal employees (OneBGS) have been more specific about what Microsoft's offer actually looks like: eight weeks of pay in lieu of notice, which is the bare legal minimum in Canada, with group health benefits cut off immediately. This contradicts earlier assurances that Canadian employees would remain employed until September 2026 while severance was negotiated. The union says it plans to fight for better terms. Whether that goes anywhere depends on how hard Microsoft wants to push back. ## What happened to id Software Two thirds of the id Software developers who worked on Doom (2016) were laid off in this round of cuts. Co-director Hugo Martin publicly claimed the studio is now the same size as when Doom (2016) launched — a framing that current and former employees pushed back on hard. The argument against Martin's framing: headcount isn't the same as institutional knowledge. The original Doom (2016) development was a brutal seven-year process involving significant crunch, and the people who survived that and stayed are not easily replaced by new hires at the same number. "Multiple hat" developers — people who can cover several roles and carry years of context — are exactly who gets lost in layoffs like this. Andrew Willis, a producer at id Software, went further in a public post, arguing that large publishers have become "terrible stewards" of the industry, focused on short-term value extraction rather than building anything lasting. His conclusion: the current climate, run by executives who don't understand games, means the industry won't produce another landmark franchise like World of Warcraft or Morrowind. His proposed fix is developer-owned studios built on fiscal discipline. id Software co-founder John Carmack commented on the layoffs too — he said he was sad, but not outraged. Make of that what you will. ## Obsidian's director responds to critics Brandon Adler, director of The Outer Worlds 2, posted on LinkedIn to address online speculation about whether Obsidian still has the identity that made it worth caring about. His argument: most lead and director roles are still held by the same people who worked on New Vegas, Pillars of Eternity, and KotOR2. The studio has changed over 20 years, he acknowledged, but the core of it is intact. He also pushed back on commentators he felt were spreading misinformation about who actually contributed to those older projects and how game development works. The context here matters: Xbox is reportedly shifting Obsidian away from new IP and toward major franchises, with a new Fallout project apparently replacing a planned Avowed sequel. Whether the studio's DNA survives that kind of strategic redirect is a different question from whether the same people are still in the building. ## Community discussion Top comments from developers on daily.dev. **@devfredx** · 1 upvotes > That's a huge amount of layoffs, I heard those in Europe have better job security can this kind of layoffs happen in Europe? > > > Also developer owned studio is not a bad idea. ## Similar posts on daily.dev - [The state of play after a truly torrid week for Xbox](https://daily.dev/posts/the-state-of-play-after-a-truly-torrid-week-for-xbox-cyibjbrdi) · Game Developer · 1 upvotes · 0 comments --- Tags: [#microsoft](https://daily.dev/tags/microsoft), [#game-development](https://daily.dev/tags/game-development), [#gaming](https://daily.dev/tags/gaming) [View this post on daily.dev](https://daily.dev/posts/microsoft-s-xbox-layoffs-id-software-obsidian-and-the-industry-fallout-iwttd2sto) ```json {"@context":"https://schema.org","@graph":[{"@type":"Organization","@id":"https://daily.dev/#organization","name":"daily.dev","url":"https://daily.dev","logo":{"@type":"ImageObject","url":"https://daily.dev/apple-touch-icon.png","width":180,"height":180},"sameAs":["https://twitter.com/dailydotdev","https://github.com/dailydotdev","https://www.linkedin.com/company/daily-dev-ltd"]},{"@type":"WebSite","@id":"https://daily.dev/#website","url":"https://daily.dev","name":"daily.dev","publisher":{"@id":"https://daily.dev/#organization"},"potentialAction":{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https://daily.dev/search?q={search_term_string}"},"query-input":"required name=search_term_string"}}]} {"@context":"https://schema.org","@type":"TechArticle","headline":"Microsoft's Xbox layoffs: id Software, Obsidian, and the industry fallout","url":"https://daily.dev/posts/microsoft-s-xbox-layoffs-id-software-obsidian-and-the-industry-fallout-iwttd2sto","mainEntityOfPage":{"@type":"WebPage","@id":"https://daily.dev/posts/microsoft-s-xbox-layoffs-id-software-obsidian-and-the-industry-fallout-iwttd2sto"},"datePublished":"2026-07-20T10:17:54.926Z","dateModified":"2026-07-23T11:53:33.489Z","description":"Microsoft's latest Xbox restructuring eliminated approximately 3,200 roles across its gaming division, with id Software losing roughly two-thirds of its Doom...","image":"https://media.daily.dev/image/upload/f_auto,q_auto/v1/posts/9fe345b2bf87bce79a4fe8e172c1f7ec?_a=AQAEuop","thumbnailUrl":"https://media.daily.dev/image/upload/f_auto,q_auto/v1/posts/9fe345b2bf87bce79a4fe8e172c1f7ec?_a=AQAEuop","isAccessibleForFree":true,"articleSection":"Collections","inLanguage":"en","publisher":{"@type":"Organization","name":"daily.dev","url":"https://daily.dev","logo":{"@type":"ImageObject","url":"https://daily.dev/apple-touch-icon.png","width":180,"height":180}},"author":{"@type":"Organization","name":"Collections","logo":"https://media.daily.dev/image/upload/s--fk_6ycEi--/f_auto,q_auto/v1780996001/logos/collections?_a=BAMAMiWQ0","url":"https://daily.dev/sources/collections"},"commentCount":1,"discussionUrl":"https://daily.dev/posts/microsoft-s-xbox-layoffs-id-software-obsidian-and-the-industry-fallout-iwttd2sto","interactionStatistic":[{"@type":"InteractionCounter","interactionType":{"@type":"LikeAction"},"userInteractionCount":15},{"@type":"InteractionCounter","interactionType":{"@type":"CommentAction"},"userInteractionCount":1}],"keywords":"microsoft,game-development,gaming","timeRequired":"PT4M"} {"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https://daily.dev"},{"@type":"ListItem","position":2,"name":"Collections","item":"https://daily.dev/sources/collections"},{"@type":"ListItem","position":3,"name":"Microsoft's Xbox layoffs: id Software, Obsidian, and the industry fallout"}]} {"@context":"https://schema.org","@type":"WebPage","@id":"https://daily.dev/posts/microsoft-s-xbox-layoffs-id-software-obsidian-and-the-industry-fallout-iwttd2sto","comment":[{"@type":"Comment","text":"That’s a huge amount of layoffs, I heard those in Europe have better job security can this kind of layoffs happen in Europe?\nAlso developer owned studio is not a bad idea.","datePublished":"2026-07-22T22:39:43.368Z","url":"https://daily.dev/posts/IwTTd2STO#c-xSJvsYtqs","author":{"@type":"Person","name":"Fredrick-Marie","url":"https://daily.dev/devfredx","image":"https://avatars.githubusercontent.com/u/78586515?v=4"},"interactionStatistic":{"@type":"InteractionCounter","interactionType":{"@type":"LikeAction"},"userInteractionCount":1}}]} ```