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“The smallest severance pay possible” – Bethesda union vows to fight as studio employees reel from “bare minimum” payout following mass Xbox layoffs
Bethesda's Montréal studio has told laid-off employees they will receive only the legal minimum severance, according to workers' union OneBGS, which is now pursuing a formal complaint against the company for allegedly breaching Canadian labour law. The dispute follows this month's mass layoffs across Microsoft's Xbox division, which affected around 3,200 staff, and adds to growing scrutiny of how Microsoft has handled the cuts at unionised studios.
The union says staff were notified of their termination on 17th July, receiving eight weeks' pay in lieu of notice plus outstanding vacation pay, and losing group health benefits immediately, terms OneBGS calls "the bare legal minimum" and a contradiction of earlier assurances given on a 6th July call that jobs would run until September while severance was negotiated with the union. Notably, the termination emails reportedly landed the same day Bethesda unveiled updates to major franchises including Fallout, The Elder Scrolls and Starfield. OneBGS has announced a protest march and, given Canada's strong labour protections, believes it has strong grounds to challenge Microsoft.
In short
- OneBGS union says Bethesda Montréal staff got only minimum legal severance
- Union claims this contradicts earlier promises made on 6th July
- OneBGS has filed a legal complaint and plans a protest march
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Microsoft allegedly assured employees on 6th July that their jobs would continue until September whilst severance was negotiated with the union, creating a legitimate expectation of good-faith treatment. By terminating everyone 11 days later with only statutory minimum severance, the company broke this promise, acting in bad faith contrary to Canadian labour law's protections. The immediate termination of health benefits and the unseemly timing of game announcements underscore the company's failure to honour its commitments to vulnerable workers.
The case against
Microsoft provided all legally-required severance and complied with Canadian employment standards, which set the baseline for employer obligations. Large corporate restructurings of this scale demand rapid execution; prolonged negotiations over enhanced severance would prolong uncertainty for all staff and complicate an already difficult process. The timing of game announcements was unrelated to employment decisions, and offering severance beyond legal requirements would establish unsustainable precedents across Microsoft's global operations.
Explained simply
Microsoft's gaming division has carried out mass layoffs across its Xbox studios, affecting thousands of staff, including workers at the Bethesda Montréal studio. Those laid-off employees have been told they will receive only the minimum severance required by law, sparking a dispute with their union, OneBGS.
The union says staff were notified on 17th July that their jobs were being terminated and would receive eight weeks' pay plus outstanding holiday pay, though their health benefits would cease immediately. OneBGS claims this breaches assurances given on 6th July that jobs would run until September whilst the company negotiated severance terms with the union.
The dispute matters because it raises questions about how Microsoft has treated unionised workers during these significant cuts, and because Canada's labour laws provide strong protections that workers can use to challenge their dismissals. The outcome could set a precedent for how severance is handled at other unionised studios affected by these layoffs.