Xbox workers stunned after jobs 'bloodbath'

Employees at Xbox-owned ZeniMax Online Studios (ZOS) described feeling "blindsided" by recent layoffs, which are part of a larger wave of job cuts across Microsoft's video game division. Morgan Goin, a senior encounter designer who worked on 'The Elder Scrolls Online,' was among those laid off last week. She noted that while staff anticipated cuts following a memo from new CEO Asha Sharma about a "reset the business," the scale of the layoffs was shocking.

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Blindsided.

In total, approximately 3,200 employees, representing an estimated 20% of the division's workforce, have been affected. Half were let go immediately, with the remaining 1,600 to follow over the next year. Xbox leadership stated these "painful" cuts are necessary to focus resources on its biggest blockbuster titles, aiming to release new installments of popular series like 'Fallout' and 'The Elder Scrolls' more quickly.

However, former employees argue that the layoffs have resulted in the loss of decades of talent and experience, questioning the company's ability to achieve its future goals. The video game industry has seen widespread layoffs since 2022, with nearly 58,000 roles cut globally. This trend is largely attributed to aggressive expansion and over-hiring around 2020, when the COVID-19 pandemic led to a surge in player numbers and spending. During this period, Xbox made significant acquisitions, including ZeniMax/Bethesda and Activision Blizzard.

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We knew something was going to happen to somebody, but not who or how much.

Despite the industry remaining profitable, the cost of game production has escalated dramatically. Factors such as the cost-of-living crisis, shifting consumer habits, and increased hardware expenses, partly due to massive AI investments, have impacted the market. Following Sharma's memo in early June, employees like Autumn Mitchell, a former senior quality assurance tester, expressed anxiety about their job security. Many developers, who are members of studio unions affiliated with the Communication Workers of America, reported a "deafening silence" from management in the weeks leading up to the layoffs, with their requests for information going unanswered.

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People are reading in between the lines'. Does it mean me? Does it mean them? Does it mean my project? Does it mean my studio?