Bethesda workers: Microsoft turned a no-layoff culture into yearly tradition of cuts post-acquisition

Xbox developers held coordinated "Save Our Devs" rallies across nine cities in the US and Canada on August 18, organized by the OneBGS union representing Bethesda Game Studios and the Communications Workers of America, to protestMicrosoft's latest wave of job cuts across its gaming division.

The rallies respond to Microsoft's plan to eliminate roughly 3,200 Xbox positions, with 1,600 already cut in an initial phase and the rest expected before mid-2027. CWA-represented Xbox workers now total nearly 4,000 unionized employees across the division, including developers, artists, engineers, producers, researchers, and support staff on franchises such as Call of Duty, Overwatch, and Warcraft. It's also not the first coordinated action of its kind: a July 15 round of protests followed an earlier cut of 440 union-represented positions across Bethesda Game Studios, ZeniMax Online Studios, id Software, and other ZeniMax teams, with more than 200 lost from ZeniMax Online Studios alone and well over half of id Software's staff let go.

From a studio with stable tenure to one with uncertainty

Lead character artist Alex Nguyen, who has worked at Bethesda for several years, described a markedly different culture under the studio's previous sole ZeniMax ownership, where long tenure was common enough that colleagues expected to retire there. That changed after Microsoft's acquisition, he said: "We didn't have layoffs before, and now... we have yearly layoffs." Nguyen also pointed to the loss of institutional knowledge as especially damaging, noting that losing even a handful of specialists who understood how something worked meant the rest of the team having to relearn it from scratch.

Nathan Hahn, who has spent four years at Bethesda Game Studios, told Kotaku in an interview that the union had tried to head off the layoffs months in advance, submitting a proposal on how to handle a reduction in force back in February. According to Hahn, the company sat on it for four months without a response before proceeding with the cuts anyway. Hahn also pushed back on the idea that the cuts mostly hit management, stressing that the people affected were largely on the ground keeping the games running, not corporate overhead. The CWA has since filed an unfair labor practice complaint with the National Labor Relations Board, alleging Microsoft violated its bargaining obligations.

Business as usual at Microsoft?

Xbox CEO Asha Sharma has described the cuts as part of a broader business "reset," while OneBGS has pushed back, saying Microsoft framed the changes differently internally. Tensions boiled over a few days before the rallies, when Bethesda developers staged a protest featuring a giant inflatable rat outside their offices after learning Sharma was visiting to review a build of The Elder Scrolls VI.

Protection has varied by studio. OneBGS achieved recognition in August 2024, alongside Bethesda Game Studios Montreal, and id Software's roughly 165 workers unionized as recently as December 2025, but Microsoft's 2022 labor neutrality agreement with the CWA never included an enforceable timeline for reaching first contracts. That's left newer unions with comparatively little formal protection against this round of cuts, unlike groups such as ZeniMax Workers United QA and Blizzard Quality Assurance, which already had contractual advance-notice and recall rights in place. Despite it all, Hahn told Kotaku morale around the collective effort was, if anything, rising, even as morale for the day-to-day work has rarely been lower.