Xbox layoffs report: id Tech likely headed for the trash, remaining staff living in fear

A damning report from Game Developer, drawing on testimonies from laid-off staff across Bethesda, ZeniMax, and id Software, paints a picture of chaos, secrecy, and a workforce left in limbo after Microsoft's Xbox restructuring axed 1,600 people last week — with another 1,600 cuts still to come before next summer.

At id Software, the situation is particularly grim. The studio lost 136 employees — roughly half its headcount — and anonymous sources directly contradict Microsoft's official line that id Tech is safe. "They've just gotten rid of all the people who could ever fix, maintain, or change id Tech, so it's most likely going to end up in the trash can," one laid-off id Software worker told Game Developer. The VFX team went from five people to zero, the technical art and design department is down to just its lead, and 90 percent of the team responsible for AI systems and gameplay has been cut. Even "employee number 13" — a veteran who worked alongside id Software founders John Carmack and John Romero — was let go. Windows Central had previously reported Microsoft's claim that "dozens of people" are still working on id Tech across multiple locations, but the anonymous source's account makes that hard to square with what actually shipped out the door. The report also notes that the Doom: The Dark Ages expansion Revelation launched the same week the cuts were announced, making the timing especially brutal for the studio.

The process itself drew sharp criticism. Staff at id Software were given roughly ten minutes' notice before a meeting to announce the layoffs — some had already started their commute and missed it entirely. The call reportedly lasted less than a minute. Slack and email access was revoked within 48 hours, leaving laid-off workers unable to reach colleagues or access information through the very email addresses being shut down. Across Bethesda and ZeniMax, staff say they were kept in the dark for weeks after Bloomberg first reported cuts were coming, with management either uninformed or unwilling to say anything. "It was left to all of us to speculate and spiral and worry," one source said. ZeniMax staff — developers of Elder Scrolls Online — say internal metrics consistently showed the studio was performing well and "paying for itself" right up until the axe fell.

For those still employed, the uncertainty is corrosive. Another 1,600 jobs are scheduled to go sometime before June 2027, and nobody knows whose they are. "I don't know how anyone remaining at Xbox Studios can feel safe knowing another 1,600 cuts are coming," one affected developer said. "And even then, what happens after June 2027? Will we get layoffs in July for the third year in a row?" The community and press reaction has been largely one of anger and disbelief — particularly around id Software, whose proprietary engine is widely regarded as one of the most technically impressive in the industry. Whether id Tech survives or gets quietly replaced by Unreal Engine 5 will only become clear when — or if — id Software announces its next game.