Elder Scrolls Online loses up to half its dev team as Xbox layoffs gut ZeniMax Online Studios

Microsoft's sweeping Xbox layoffs have hit ZeniMax Online Studios hard, with sources telling Kotaku that as much as half of the Elder Scrolls Online development team has been cut. No studios are closing outright, but the scale of the cuts has left the ESO community and former developers openly questioning the game's future.

Community manager Jessica Folsom addressed players on the ESO forums, confirming that the game's roadmap is changing. "Looking beyond Season One, the roadmaps we previously shared will be shifting," she wrote. "We want to take the time to evaluate the work in front of us and then lock down an updated schedule." The total number of people laid off at ZeniMax Online Studios has not been confirmed. Former ESO content designer Andrew Young, who worked at the studio from 2012 to 2024, posted a thread on X expressing grief and frustration. "I'm just so angry today," he wrote. "People will never know the blood, sweat, and tears that went into making ESO or how we basically funded other failing projects while never getting enough resources to really keep up with our release cadence. The team deserved much better." Young added: "I've been gone for a while, but talking to people today and realizing there's really no one left and no changing it now makes my heart ache."

This is not the first time ZeniMax Online Studios has been hit by Microsoft cuts. The 2025 Xbox layoffs already forced out studio president and game director Matt Firor and killed Project Blackbird, an unannounced sci-fi MMO in development at the studio. ESO itself had already been scaling back — the game moved away from large annual Chapter expansions toward a seasonal content model, and the cadence of dungeons and new zones had already been reduced before these latest cuts. PC Gamer draws a parallel to Amazon's New World, a moderately successful MMO that was shut down when Amazon pulled back from its gaming ambitions, as a cautionary example of what can happen when a publisher loses confidence in an online game.

Player reaction is bleak. Many fans are predicting ESO will enter maintenance mode within the year, pointing to the Destiny 2 wind-down as the most recent comparable situation — one player noted they had only just migrated from Destiny 2 to ESO. Others invoked the collapse of Warhammer Online as a historical parallel. The core fear is a death spiral: if players believe a live-service MMO has no future, they stop investing time, which accelerates the decline. What comes next depends on what Bethesda and Microsoft decide ESO is worth — and right now, neither has said.