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The latest wave of layoffs at ZeniMax has raised serious questions about the future of Xbox Game Studios.

In this video, I discuss the recent job cuts at ZeniMax, why I think more layoffs could be coming across Xbox Studios, and why I believe many of these problems stem from decisions made during Phil Spencer's leadership of Xbox.

We'll also look at Microsoft's recent gaming strategy, studio acquisitions, and whether Xbox can recover from the challenges it now faces.

Do you think more Xbox studio layoffs are coming? Let me know your thoughts in the comments.

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#Xbox #XboxStudios #Zenimax #GamingNews
Transcript
00:00Microsoft layoffs hit ZeniMax hard as new filing reveals nearly 400 jobs eliminated.
00:08Newly released government filings have revealed the full extent of Microsoft's latest layoffs
00:14at ZeniMax, showing that 379 employees lost their jobs across ZeniMax Online Studios and
00:21ZeniMax Media.
00:22According to a Maryland Warrant Act filing, 213 of those layoffs came from ZeniMax Online
00:29Studios, the developer behind the Elder Scrolls Online, while another 166 employees were let
00:35go from ZeniMax Media, Bethesda's parent company.
00:39The filing does not separate Bethesda Game Studios into its own category because Bethesda
00:44and ZeniMax Media share the same office location.
00:47As a result, it remains unclear exactly how many of those 166 layoffs directly affected
00:54Bethesda's developers versus employees working in publishing and other support roles.
01:00The Maryland filing follows a separate Warrant Notice in Texas that previously confirmed 136
01:07layoffs at id Software, the studio behind Doom.
01:11Those job cuts were also listed under ZeniMax Media.
01:14The numbers paint an especially concerning picture for ZeniMax Online Studios.
01:20Reports from late 2024 indicated that the studio's employee union represented approximately 461 workers.
01:28Combined with a previous round of layoffs in July 2025 that eliminated 62 positions, the
01:35studio has reportedly lost 275 employees over the past year.
01:40If those figures are accurate, ZeniMax Online Studios now has roughly 186 employees remaining,
01:47around 40% of the workforce it had just over a year ago.
01:51That represents a reduction of approximately 60% of the studio's staff in a relatively short period.
01:58The scale of the cuts has surprised many within the gaming community, particularly because
02:03the Elder Scrolls Online has long been viewed as one of Bethesda's most successful live service titles.
02:10A LinkedIn profile from former ESO UX lead Gary Boudhu, shared online in 2024 before being edited, claimed the MMO
02:19had generated roughly $15 million in monthly revenue for more than a decade.
02:24While those figures have not been officially confirmed by Microsoft or ZeniMax, they have fueled questions
02:31about why a studio associated with a consistently profitable game experiences such significant layoffs.
02:38The gaming community had responded with frustration, with many pointing to Microsoft's ongoing cost-cutting
02:44efforts despite strong revenues from several of its gaming divisions.
02:48Others argued that the layoffs highlight a broader trend across the industry, where even successful
02:54studios and profitable live service games are no longer insulated from large-scale restructuring.
03:01Although Microsoft has not provided a detailed explanation for the reductions at ZeniMax Online Studios,
03:07the Warn filings offer the clearest picture yet of just how deeply the latest round of layoff
03:12has affected one of Bethesda's largest development teams.
03:20And with that, I have to say, are you really surprised that this was coming?
03:28This is something else I thought we could be sure of that was to follow.
03:36Now, why would I say that?
03:38Well, when Phil Spencer was making decisions left and right that would make a normal person
03:44scratch their head and go, why make that decision?
03:49He was losing money left and right for Xbox.
03:55So you have Phil Spencer making decisions that no sane person would make.
04:01I called him out many times when me and Dr. Games 101 did this podcast together.
04:08Some of the clips are still up there about how I criticized Phil Spencer, rightfully so.
04:15And like I said, I don't know what took Phil Spencer's bosses so long to remove him from
04:23what he was doing.
04:24Phil Spencer, with what he did, they're going to have to make up the money that he lost somewhere
04:34with his bad decision making.
04:36I'm expecting more studios to have to either A, have a significant portion of their workforce
04:45cut or to be shut down entirely because they got to do something.
04:52They can't, they can't just kick, they can't just kick the can down the road.
04:57If they were going to do that, they might as well have left Phil Spencer and control what
05:01he had control in.
05:03So, do, you know, but the thing is, they got to make that, they got to make that money and
05:09they got to do something different.
05:14So, you know, I mean, it sucks, you know, I never really cared about the Elder Scrolls
05:18online, but come on, Doom has been one of my favorite games since I was a kid, maybe like
05:25in the top five somewhere.
05:28Yeah, so, you know, it sucks, it sucks what happened with ZeniMax, but I would not be surprised
05:39if they are the, if this is, if it doesn't end with them, basically.
05:45But I do think this is all connected to Phil Spencer's mess that he spent years creating,
05:50by the way.
05:51Think about it, he spent years creating this mess, bad decision after bad decision.
05:56This is the same guy who said he knew when the Activision Blizzard merger went through,
06:01he was going to have to fire thousands of employees.
06:04He said he knew that.
06:08And that's just one of the many, many bad decisions that I've called him out on over
06:13the years.
06:16So, yeah, the fact that he, the fact that Microsoft has to shut down studios now, what did you expect
06:28them to do?
06:29Just keep losing money at the same rate?
06:32Like I said, it sucks, but Xbox itself might be, might need to restructure almost entirely,
06:39or a significant portion of Xbox might need to restructure to undo this damage.
06:47So, it sucks what happened to ZeniMax, it sucks what's happening to Bethesda, but at the
06:55same time, it was the former guy in charge.
07:00That set these events in motion to happen later on.
07:08So, you know, it sucks, but I would not be surprised if this leads to more in the future,
07:15in the near future.
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