Bethesda Layoffs Were Rare Before Acquisition by Microsoft, Says Developer

“That’s why a lot of people had such long tenure here, and they were like, ‘Yeah, this is the place I’m gonna retire at," said Alex Nguyen.

Posted By | On 19th, Aug. 2026

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Over a month after Xbox’s controversial decision to lay off around 1,600 employees, with 1,600 more planned for the rest of the fiscal year, a lead character artist at Bethesda, Alex Nguyen, spoke about how layoffs at the studio were rare before its acquisition. In an interview with Kotaku, Nguyen noted that the rarity of layoffs was “one of the benefits” of working at the studio behind games like The Elder Scrolls.

He even pointed out that Bethesda has had rocky game releases in the past, like Fallout 76 and The Elder Scrolls Online. Rather than layoffs, ZeniMax instead gave them time to make improvements. Since coming under Microsoft’s ownership, however, things have changed quite a bit.

“That was one of the benefits. That’s why a lot of people had such long tenure here, and they were like, ‘Yeah, this is the place I’m gonna retire at,’ or ‘this is the place where I’m gonna finish out,’ or ‘I love being here because I want to stay in the industry for a long time.’ That was basically one of the benefits of being at Bethesda or a Zenimax studio in general.”

“But since we’ve been under Microsoft…it feels like something has changed. We didn’t have layoffs before, and now we all of a sudden we have yearly layoffs.”

Technical producer Nathan Hahn went on to talk about the importance of protecting jobs, not only for employee morale, but also because game development suffers. “Every coworker contributes to the success of our company. Without us, Bethesda games aren’t Bethesda games. If only five people knew how this thing worked and you let all five of them go, that’s a morale killer because it’s like we already knew this, and now we have to learn it again.”

Nguyen also pointed out that Microsoft was being misleading when it said the layoffs largely affected management layers with the aim of streamlining game development and approval processes. “We’ve seen statements that it’s like a whole bunch of middle management was let go. It’s not middle management. It’s people on the ground making sure that this game works and putting it in the hands of players.”

Earlier this month, Bethesda employees and members of the Communications Workers of America union had protested the mass layoffs by bringing a large inflatable rat named “Scabby” to display outside the studio’s Maryland office. The protest also included the planting of 800 red flags, each representing one of the workers affected by the layoffs. Interestingly, these protests took place on the same day as Xbox CEO Asha Sharma was visiting the Maryland office to try out an early build of The Elder Scrolls 6.

“Live playthrough of The Elder Scrolls 6: ******** this morning. The scale and grandeur are incredible. The story is even greater.”

As for the layoffs, Microsoft CEO Satya Nadella called them “necessary decisions” that were made to ensure long-term growth for Xbox.


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