CWA Canada has publicly condemned Microsoft over the handling of layoffs at Bethesda Game Studios Montreal, telling Game Developer that around a dozen union members were terminated via a three-minute video call on July 8, 2026, prevented from asking questions, and instructed to remain at home for the following eight weeks while continuing to receive pay.
Here’s the context: The employees impacted were union members under CWA Canada, The Montreal cuts are one piece of a much larger restructuring: Microsoft has confirmed 3,200 roles will be eliminated across Xbox by the end of the current fiscal year, with roughly half of those cuts still to be announced. The same wave has hit id Software, ZeniMax Online Studios, and Obsidian Entertainment, where Kotaku reports that between 60 and 70 people have been let go at Obsidian Entertainment. We’ve covered the broader pattern of Bethesda layoffs affecting senior developers as this restructuring has unfolded.
CWA Canada president Carmel Smyth said those who lost their jobs had been at Bethesda for up to a decade. Carmel Smyth described the experience as workers being told to stay home and that they were no longer needed – prevented from asking questions during the call. Smyth characterised the broader situation at Xbox as psychological warfare, noting that even employees who weren’t cut are already looking for other work and that morale and game quality will suffer as a result.
Smyth also pointed out that a manager at Bethesda Game Studios Montreal had reportedly told remaining staff there would be no additional cuts at the studio – a claim that sits uneasily alongside an employer-wide restructuring that Microsoft itself says isn’t finished yet.
Honestly, the optics here are genuinely bad, and not just because of the three-minute call. The story’s headline timing – layoffs allegedly communicated on the same day as a major Fallout franchise announcement, with Bethesda simultaneously generating positive Fallout buzz – is exactly the kind of juxtaposition that makes workers and observers feel the timing was designed to minimise scrutiny. Whether intentional or not, it looks like a company leaning into good news coverage as cover for difficult personnel decisions. That’s a pattern the industry has seen before, and it never lands well.
The deeper issue is what this signals about Microsoft‘s approach to its unionised workforce. If the union’s account of a three-minute call with no questions permitted is accurate, that’s not just bad communication – it’s a question of whether Microsoft met its legal and contractual obligations before issuing termination notices to certified union members. The union is framing this as a test case, and the ongoing labour action from Bethesda union members suggests they intend to push it.
The U.S. CWA branch has separately pledged to take all necessary legal and contractual action to defend members caught up in the Xbox purge, and said, “We will demand immediate bargaining-over fair severance, over vendor-contract decisions, over internal placement so that qualified employees can move into open roles, and over recall rights,” vendor-contract decisions, internal placement so that qualified employees can move into open roles, and recall rights, said Mike Davis, vice president of CWA District 2-13, in a statement to Aftermath.
What remains unclear is how Microsoft will respond to the union’s account of events, whether the company properly consulted CWA Canada before issuing termination notices, and what the final severance terms will look like once bargaining concludes. Game Developer notes it has reached out to Microsoft for comment,
What to watch: The union’s next move on legal and contractual grounds will clarify what happens next. Any Microsoft public statement on the Montreal situation will also be worth scrutinising closely given the level of detail in CWA Canada’s account of the termination process.
If you’re a current or former Bethesda or Xbox employee with a perspective on how these layoffs were handled, how closely does the union’s account match what you’ve heard – and does the timing relative to franchise announcements change how you read Microsoft‘s approach to this restructuring?
