Bethesda to focus on its biggest franchises as Xbox cuts 3,200 jobs

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The boss of Bethesda has told staff the company must now focus on its “strongest franchises” amid sweeping layoffs across Xbox.

Today, Microsoft announced 3,200 staff are set to lose their jobs at Xbox across the current financial year , with 1,600 of those layoffs happening today, July 6. In an email sent to staff, Xbox CEO Asha Sharma called it the most “significant” restructure in Xbox history, insisting Microsoft’s gaming business “is not healthy.” Overall, Xbox is losing about one-fifth of its staff as part of Sharma's push for growth.

Bethesda is hit particularly hard by the layoffs, IGN understands, with staff across its many development studios either already told they are cut or facing an uncertain future. In an email to Bethesda staff sent following Sharma's memo, Bethesda boss Jill Braff said the layoffs and change in strategy “reflect the realities of our industry and business – and our responsibility to ensure Bethesda is operating from a more stable foundation.”

"To be successful in the future, we need to change course,” Braff continued. “We must strengthen our business, return to sustainable growth, and ensure we can continue investing in our franchises and our players. I know that doesn't make a day like today any easier.”

But what does that actually mean beyond layoffs at the likes of id Software, ZeniMax Online Studios, and elsewhere at Bethesda? Without naming games, Braff said “to best position Bethesda for future growth, 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.”

“From there, we’ll align the right talent, technology, and resources across the organization to deliver on those priorities,” Braff added.

IGN has already explored how the changes at Bethesda mean focusing on big hitters such as The Elder Scrolls and Fallout, leaving Starfield potentially out in the cold . With Microsoft planning to sell or close Arkane Lyon, Marvel’s Blade may fall by the wayside or be published elsewhere . The Elder Scrolls Online developer ZeniMax Online Studios has already signalled content roadmap changes with fewer staff following the layoffs. Meanwhile id Software, developer of the Doom games, has suffered significant cuts. MachineGames has survived the cull, with a new Wolfenstein game pretty much an open secret at this point . But it’s looking increasingly unlikely that Indiana Jones and the Great Circle will get the sequel it teased at the end of the game.

With such a reduced headcount, id Software may be left to support other games in development at Bethesda, such as MachineGames’ Wolfenstein 3 and perhaps even a future Fallout game, both of which have first-person shooting — the genre id specialises in. Where that leaves the likes of Doom and Quake is unclear.

Meanwhile, with Xbox hammering on the door of Fallout, New Vegas developer Obsidian, which is without a confirmed new project following the commercial failure of last year’s Avowed and The Outer Worlds 2, may be tasked with making a new game in the franchise. If that happens, could Bethesda studios help out?

“By working more closely across the organization, sharing expertise and capabilities, and focusing our investments on the opportunities with the greatest potential, we believe we can better support our franchises and IP with meaningful long-term potential,” Braff continued in the email.

Bethesda Game Studios has The Elder Scrolls 6 in the works, and the hope is it will launch in the coming years. Development chief Todd Howard has indicated multiple times that Fallout 5 will follow, but it was thought that that sequel wouldn’t materialize for many, many years. Perhaps following this Xbox reset, it could be closer than expected.

Bethesda boss Jill Braff’s email to staff is below:

Team,
I want to acknowledge the changes taking place across XBOX, including here at Bethesda, where a number of our colleagues have been impacted. Today's news affects people who have worked alongside us, inspired us, challenged us, and helped build the studios, games, and culture that define Bethesda.

Across our global organization, some employees are leaving the company, while certain countries review strategic options through processes required by local law. While each situation is different, what they share is uncertainty for people in our community.

I want to express my sincere gratitude to everyone who has been impacted. Your talent, creativity, dedication, and contributions have helped shape Bethesda in meaningful ways, and our immediate focus is supporting you through this transition. I also know this news is difficult for many across our organization, whether you're personally impacted, supporting a teammate, or simply trying to process what comes next.

The intent behind today's announced changes is consistent with the broader direction for XBOX: creating greater focus, improving execution, and positioning our business for long-term success. These shifts also reflect the realities of our industry and business – and our responsibility to ensure Bethesda is operating from a more stable foundation. To be successful in the future, we need to change course. We must strengthen our business, return to sustainable growth, and ensure we can continue investing in our franchises and our players. I know that doesn't make a day like today any easier.

As we look ahead, we 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. This model enabled us to create some of the industry's most beloved franchises. However, rising player expectations, increasing development complexity, and a more competitive market have changed the economics of our industry.

To best position Bethesda for future growth, 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. From there, we’ll align the right talent, technology, and resources across the organization to deliver on those priorities. By working more closely across the organization, sharing expertise and capabilities, and focusing our investments on the opportunities with the greatest potential, we believe we can better support our franchises and IP with meaningful long-term potential.

This does not change the importance of exceptional creative work, craftsmanship, and innovation – which is what makes Bethesda special. Our studios’ and teams’ identities, talent, and expertise remain essential to our success. What changes is how we align those strengths, bringing them together around our franchises and IP, to position Bethesda for long-term growth and continued investment in our future.

We will share more about our direction in the weeks and months ahead. But for today, my focus is on the people who have made – and those who will continue to make – Bethesda what it is. Please take care of one another. Reach out to a colleague. Offer support where you can and give people the space they may need as they process today's news.

Even during a challenging time, I remain confident in what we can accomplish together. We have extraordinary talent, some of the most beloved franchises in our industry, and tremendous opportunities ahead. The work we are doing now is about ensuring we are positioned to realize that potential for years to come. Thank you for everything you do for Bethesda, our players, and each other.

Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.