Multiple current and former Bethesda Game Studios staff have told IGN that this week’s Xbox layoffs will have a “substantial and cascading effect” on The Elder Scrolls 6, with more than 50 staff cut from active development – including, per one source, a developer who had been at the studio since Morrowind.
Here’s the context: The cuts are part of the broader 1,600-person reduction announced by newly-installed Xbox CEO Asha Sharma, who described it in an internal email as the most “significant” restructure in Xbox history and stated plainly that Microsoft’s gaming business “is not healthy.” A further 1,600 departures are expected across the remainder of 2026 as the division reshapes itself around its biggest franchises. In a follow-up memo to Bethesda staff, studio head Jill Braff said the changes “reflect the realities of our industry and business” and that Bethesda must “return to sustainable growth” – language that does little to soften the reality of losing senior talent mid-production on the studio’s most consequential project.
The losses span every discipline. Staff described the departures as cutting across programmers, artists, and designers – not a single function that could be quietly ring-fenced. Offices at both the Dallas, Texas and Rockville, Maryland locations saw informal “Celebrations of Service” memorials – framed photos and flowers in common areas – before HR ordered at least one dismantled. The Bethesda Game Studios Union has been publicly pushing back, directing fans to an Xbox Player Voice feedback post that has now gathered more than 2,588 upvotes, placing it in the top 20 suggestions on the platform.
Honestly, the specific damage here is worse than a headline number suggests. Bethesda’s proprietary toolset is not something a new contractor picks up in an onboarding week – staff said directly that they’re already being asked to train replacement contractors, and that the studio’s tools mean outside developers simply aren’t going to arrive job-ready. Replacing senior, tenured developers with cheaper outsourced labor on a project of this scale, at this stage, is exactly the kind of structural decision that compounds over years. The Elder Scrolls 6 was already reported to be at least two years from launch as of July 2026, meaning any slippage doesn’t push it from 2027 to 2028 – it pushes an already historically long wait even further into the decade. Given that Starfield‘s mixed reception raised the stakes for TES6 considerably, losing “key, high-performing people in the trenches” right now is about the worst version of this news.
The contractor concern extends beyond TES6 itself. Staff flagged that Fallout 76‘s ongoing support – a live-service title that still requires consistent updates – has already seen in-house QA work shifted to overseas staff at outsourcing firm Keywords. One developer said they had “no idea” how the game continues without an external studio stepping in entirely. You can follow that thread on what Bethesda has been building toward with Fallout 76 to understand the size of that ongoing commitment.
What remains unclear is exactly how Microsoft intends to backfill the gaps structurally. Staff were told that colleagues from ZeniMax Online Studios – developer of The Elder Scrolls Online – would help cover lost ground on TES6, but publicly-available layoff notices show ZOS itself lost 212 staff in the same wave. It’s not obvious what cross-studio support looks like when the supporting studio has also just been significantly reduced. The broader picture of Xbox’s restructuring and its effect on studio workloads makes that question harder, not easier, to answer.
What to watch: The next meaningful signal will be whether Microsoft or Bethesda acknowledges a revised development timeline publicly – either at a future Xbox showcase or through an earnings disclosure. Watch also for new job postings or outsourcing contracts around 2027 that would indicate the scale of the talent replacement effort currently underway.
Does losing tenured, discipline-spanning staff mid-production change your expectations for The Elder Scrolls 6‘s quality, or just its timeline? And how much runway does Xbox have before a flagship single-player RPG gap becomes a serious platform problem? Let us know in the comments.
