More than 50 employees have been cut from Bethesda Game Studios, and the people still building The Elder Scrolls V: Skyrim's long-awaited successor are furious about it. Multiple current and former Bethesda staff, speaking anonymously to protect their jobs, say this week's Xbox layoffs will have a "substantial and cascading effect" on The Elder Scrolls 6's development, threatening the game with further delays, severe crunch, and the permanent loss of institutional knowledge that simply cannot be replaced overnight.
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The cuts hit people who were actually building the game
These weren't redundant roles or administrative positions. Staff describe the people let go as "key, high-performing people in the trenches" spanning every discipline: programmers, artists, and designers. One employee noted that a colleague who had been at the studio since Morrowind was among those cut. That kind of tenure represents decades of proprietary engine knowledge, design philosophy, and hard-won experience building some of the most complex RPG games ever shipped.
The emotional response inside the studios has been striking. Makeshift "Celebrations of Service" memorials appeared in the common areas of Bethesda's offices in both Dallas, Texas, and Rockville, Maryland, featuring framed photographs of laid-off workers alongside bouquets of flowers. At least one of those displays was later dismantled on orders from the company's HR department.
The Bethesda Game Studios Union has also posted about the situation publicly on Bluesky, pointing followers to an Xbox Player Voice feedback post that has now accumulated over 2,500 upvotes, placing it in the top 20 user suggestions on Microsoft's official feedback platform.
What developers fear will happen next
"There is a fear that we are going to be replaced by cheaper, contracted labor, or we will hire folks to replace them that will need to be onboarded," one Bethesda developer said. "Our tools are proprietary. Other devs aren't going to know how they work. That results in more delays, and we'll need to crunch to make up the time."
The concern isn't hypothetical. Staff point to the studio's QA department as a preview of what's coming, where in-house work has already been handed to overseas staff at outsourcing firm Keywords. Colleagues are reportedly already being asked to train new contractors. One developer said they'd heard that staff from ZeniMax Online Studios (the team behind The Elder Scrolls Online) would be brought in to fill gaps on The Elder Scrolls 6, though ZOS itself lost 212 staff in the same wave of cuts, making that plan look thin on paper.
The broader context makes the situation worse. id Software reportedly lost 136 of its 185 full-time employees. Obsidian Entertainment shed roughly a quarter of its staff and has been redirected to a new Fallout game. Arkane Lyon faces a potential sale or closure. The cuts are part of a 1,600-person reduction ordered by newly-installed Xbox CEO Asha Sharma, who described the restructure as the most "significant" in Xbox history and stated plainly that Microsoft's gaming business "is not healthy."
Morale has collapsed, and the long-term picture is bleak
"We've all been very excited and hyped for TES 6 and this has had a crushing effect on morale," one staff member said. "We were already running a tight ship and are worried about this delaying the game."
Bethesda boss Jill Braff addressed staff following Sharma's announcement, framing the cuts as necessary to build a "more stable foundation" and return to "sustainable growth." The messaging landed poorly. Staff who survived the first round were told they're safe from the next 1,600 departures planned across Xbox this year, but that reassurance has done little to settle nerves.
"Even if that's true, who's to say there's not another 1,600 next year after that?" one laid-off employee said. "It's had the chilling effect of realizing you don't get to retire off your work at Xbox. Your time ends when you quit or are laid off, that's it."
The Elder Scrolls 6 is still one of the most anticipated games in Xbox's lineup, a true generational release for fans who have spent years revisiting The Elder Scrolls V: Skyrim guides while waiting for something new. But right now, the people building it are grieving colleagues, training contractors, and wondering whether the game they're pouring years into will survive the business decisions being made above them.
