'We Need to Change Course' — Bethesda Boss Tells Staff Company Must Focus on 'Our Strongest Franchises' Amid Xbox Layoffs

Bethesda's leadership has informed employees that the company must pivot its focus to its "strongest franchises" as mass layoffs sweep across Xbox.

On July 6, Microsoft announced it would cut 3,200 Xbox staff over the current financial year, with 1,600 layoffs taking effect that day. In a company-wide email, Xbox CEO Asha Sharma described this as the most "significant" restructuring in Xbox history, stating that Microsoft's gaming business "is not healthy." Overall, Xbox is shedding roughly one-fifth of its workforce as part of Sharma's growth strategy.

According to IGN, Bethesda has been hit especially hard by the layoffs, with employees across its numerous development studios either already notified of termination or facing an uncertain future. In an email to Bethesda staff following Sharma's memo, Bethesda boss Jill Braff said the layoffs and strategic shift "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 this mean beyond layoffs at studios like id Software, ZeniMax Online Studios, and other Bethesda teams? Without naming specific 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 this shift means Bethesda will focus on heavy hitters like The Elder Scrolls and Fallout, potentially leaving Starfield out in the cold. With Microsoft planning to sell or close Arkane Lyon, Marvel’s Blade may be shelved or published elsewhere. ZeniMax Online Studios, developer of The Elder Scrolls Online, has already signaled content roadmap changes with fewer staff. Meanwhile, id Software, the maker of Doom, has suffered significant cuts. MachineGames has survived the cull, with a new Wolfenstein game being an open secret. However, it looks increasingly unlikely that Indiana Jones and the Great Circle will get the sequel teased at its end.

With a reduced headcount, id Software may be left to support other Bethesda games in development, such as MachineGames' Wolfenstein 3 and possibly a future Fallout game—both first-person shooters, id's specialty. Where that leaves Doom and Quake is unclear.

Meanwhile, with Xbox pushing for Fallout, Obsidian, the developer of New Vegas, which lacks a confirmed new project after the commercial failures of Avowed and The Outer Worlds 2, may be tasked with making a new game in the franchise. If that happens, Bethesda studios could assist.

"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 development, with hopes for a release in the coming years. Development chief Todd Howard has indicated multiple times that Fallout 5 will follow, but it was thought that sequel wouldn't materialize for many years. Perhaps after this Xbox reset, it could arrive sooner than expected.

Bethesda boss Jill Braff's full email to staff is below.