Xbox layoffs hit Bethesda: Elder Scrolls Online developer 'gutted'

Polygon RSS Feed✍ Austin Manchester📅 July 6, 2026⏱ 3 min read(about 1 month ago)

Overview & Key Takeaways

On Monday, Xbox announced significant layoffs. Bethesda has been reportedly hit hard by job losses, especially the Elder Scrolls Online team.

On Monday, Xbox announced it was laying off 1,600 employees, with 3,200 in total to be laid off by the end of its fiscal year. Xbox is divesting from four studios, with the future of a fifth, Dishonored developer Arkane Studios, still unknown.

ZeniMax Media and its subsidiary Bethesda Softworks have reportedly been impacted heavily by the layoffs. Though studios like Id Software and ZeniMax Online Studios haven't shut down, they are losing "a significant number of staff," according to Bloomberg's Jason Schreier.

The Elder Scrolls Online developer ZeniMax Online Studios has been "seemingly gutted," according to a Kotaku report, with potentially up to half the team being let go. The game's community manager posted in the game's forums that the future of ESO will be "shifting" after the developer launches Season One on July 8. "We want to take the time to evaluate the work in front of us and then lock down an updated schedule. While we'd love to share a concrete details today, stepping back to get our plans straight will let us come back to you with a clear timeline."

Id Software's next Doom release arrives on Tuesday with The Dark Ages' expansion Revelations. After that, it's not clear what's next for Id Software, especially after the layoffs.

Bloomberg reports that, as a result of the layoffs, ZeniMax will focus on its biggest franchises going forward: Doom, The Elder Scrolls, Fallout, Quake, and Wolfenstein. Bethesda will also change its approach to future projects because of the layoffs. In an internal email obtained by IGN, Bethesda head Jill Braff said Bethesda "will meaningfully evolve how we operate. For decades, Bethesda has organized its business around the individual roadmaps of our largely independent development studios, supported by centralized publishing and corporate teams."

Those "largely independent development studios" sound like they will be more fluid going forward. "We are shifting from a planning model primarily centered on what's next for each independent studio to one that focuses on our strongest franchises and determining the content roadmap that best serves our players and Bethesda as a whole," Braff continued. "From there, we’ll align the right talent, technology, and resources across the organization to deliver on those priorities."

The details are still hazy, but we have a clearer picture of what Xbox will focus on moving forward

To the dismay of some players, Starfield was not mentioned by anyone as a priority for Bethesda. The space-based RPG launched in 2023 to a mixed reception, though that didn't stop over 15 million people from checking it out in its first year (thanks to its day-one launch on Xbox Game Pass). It was released on PlayStation in April 2026, where it didn't make too much of a splash.

While more Starfield won't be on the way, what Xbox does want from Bethesda is more Elder Scrolls and Fallout. The Elder Scrolls 6 has been in development for a long time now, and still seems years away. In June, Xbox chief content officer Matt Booty gave an update on the game, though not a substantial one. Essentially, The Elder Scrolls 6 is still in development, and "it’s coming along well. And we’ll make sure to announce it and really reveal it at the right time."

It's been a tough few weeks for Team Green

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