We have recently heard rumors saying that Zenimax and Bethesda will be 'significantly' impacted by Xbox's company-wide restructuring. So far, these rumors are coming true in depressing ways, as DOOM developer Id Software confirms it has lost over 136 staff, and now the team behind The Elder Scrolls Online, ZeniMax Online is next on the chopping block.
According to a WARN report released by the State of Maryland (via VGC), Zenimax Online has lost 213 employees thanks to Xbox's big "Reset". In addition, Zenimax Media Inc., the company that owns Bethesda Game Studios, has also lost 166 employees.
I’m just so angry today. 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.July 6, 2026
One of the game developers who previously worked at ZeniMax Online, Andrew Young, has reacted with anger and disappointment at this news, stating that "I’m just so angry today. 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."
This news will no doubt fuel the flames of angry fans letting their harsh criticisms and opinions be known to Microsoft about this decision, spurred on by Bethesda's Union, which feels similar sentiments of frustration about the whole situation.
However, the good news is that there are no reports so far that The Elder Scrolls Online MMO is shutting down as a result of these layoffs, but whether or not ZeniMax Online will be able to bounce back from this loss as it did with 2025's layoffs that forced it to cancel its secret "Project Blackbird game" remains to be seen.
There's little doubt that more official reports of the exact damage done to Xbox's game studios will continue to be released as the company's restructuring goes on. So, we'll keep you posted on further developments regarding the ongoing situation at ZeniMax and Bethesda.
When do you think these mass layoffs will end? Do you think Xbox's game studios will be able to bounce back from these layoffs and continue making games? Do you think The Elder Scrolls Online will be able to survive now that ZeniMax Online has lost a considerable amount of manpower?
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