On the morning of July 6, Asha Sharma, the chief executive of Xbox, sent an email to all employees across the division titled "Resetting Xbox." The message outlined a major restructuring of Microsoft’s console business, including the layoff of 3,200 employees over the next financial year, with 1,600 positions eliminated immediately. Shortly after, Teams meeting invites were sent to studios across the company. Employees like Anne Barrett, who worked at Bethesda Game Studios Austin, described the meetings as virtual calls with managers where they were informed of their layoffs. Cameras and microphones were turned off, and employees were told they would lose access to their Slack channels, a common communication tool for remote teams. Before Slack was shut down, employees sent farewell messages to colleagues. Emails would be disabled a few days later. Bethesda Games Studios and ZeniMax Online Studios had been unionized in 2024, with both Barrett and Morgan Goin, a former ZeniMax Online Studios employee, serving on their respective bargaining committees. According to the Worker Adjustment and Retraining Notification (WARN) Act, companies with 100 or more employees must provide 60 days' notice before major layoffs. This means affected staff at U.S. studios will be paid until September 4. Union representatives are now negotiating with Microsoft for severance packages and benefits, and are trying to secure re-employment for some affected workers. Rallies are being held outside studio buildings across North America, with the Bethesda union seeking support from gamers through social media. Employees had been hearing rumors about potential layoffs for weeks, and some had seen a June 10 Bloomberg article warning of upcoming job cuts. Barrett expressed disbelief and devastation at the sudden layoffs, noting that Bethesda’s work on high-profile titles like Skyrim and Fallout made her feel secure in her position. Goin described the emotional toll, including symptoms of depression and the need to focus on basic needs like food and water. Simon Préfontaine, a former designer at Bethesda Game Studios Montreal, expressed concern about future financial stability and health insurance. He noted the emotional impact of losing colleagues and the sense of grief over lost careers. Many employees were confused by the lack of clear reasoning behind the layoffs. Alex Nguyen, a union bargainer at Bethesda Games Studios Dallas, noted that experienced employees with long tenure were laid off without apparent justification. Id Software, known for Doom and Quake, lost 136 staff, a majority of its workforce. VFX artist Derek Best claimed the studio was reduced to a "support studio size." Barrett expressed concerns about the impact on game quality, noting the loss of institutional knowledge and the difficulty of replacing long-term employees with new hires. Microsoft stated that the severance terms offered to union-represented ZeniMax colleagues are comparable to those given to non-union employees, including up to 39 weeks of severance pay, six months of Cobra (continued health insurance), and 16 weeks of outplacement support. The union is continuing negotiations, with both sides exchanging counterproposals. The union emphasized the need for a proposal that addresses the real consequences faced by employees, including loss of employment, income, and benefits. At least 1,600 more redundancies are expected as the restructuring continues. Employees expressed concerns about the future of the gaming industry, noting the challenges of long development cycles and the potential shift toward more indie and mid-tier games. Barrett and Nguyen both expressed a sense of disillusionment with the industry, noting a loss of creativity and investment in long-term projects.