Microsoft’s recent Xbox layoffs have cut 3,200 staff in FY27, jolting key teams at Bethesda Game Studios and reshaping the console’s talent pool.
Microsoft cuts 3,200 amid slowing Game Pass growth
CEO Asha Sharma announced the layoffs, citing that previous studio acquisitions failed to deliver expected returns and that Xbox Game Pass revenue was flatlining.
The company has already terminated 1,600 positions and slated an additional 1,600 for the near future, a figure that will be reflected across the broader Xbox ecosystem.
Union rockets at Microsoft for employees’ well‑being
On BlueSky, the Bethesda Game Studios Union struck a forceful statement condemning the layoffs, arguing that senior leaders’ missteps are punished by ordinary staff.
“Regular employees end up paying the price for leadership’s mistakes,” the union said, demanding accountability for the abrupt downsizing.
Image Credit: Bethesda Game Studios Union / BlueSky
Veteran teams hit hard
The layoffs include veterans who have spent decades within Xbox and Bethesda, prompting union leaders to question how long the cycle of cuts will persist.
Rhetoric from the union focuses on the human cost, asking when profitability pressures will stop overriding career stability.
Union secures negotiating power for severance
Because Bethesda staff belong to the One BGS union, Microsoft must negotiate terms, ensuring that severance packages and support services remain robust.
The union insists it will leverage its collective voice to get the best possible exit conditions for affected workers.
Beyond Bethesda: other studios depart
In addition to the internal cancellations, studios such as Ninja Theory and Undead Labs are leaving the Xbox family entirely.
Coupled with rising console prices and the PlayStation disc controversy, the industry’s landscape appears to be shifting on multiple fronts.
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