On 6 July, Xbox chief executive Asha Sharma emailed staff at Microsoft's gaming division to announce the largest restructuring in the console business's history: 3,200 job losses across the 2027 financial year, with 1,600 roles cut immediately. Affected employees describe an abrupt process – short, camera-off Teams calls with a studio manager followed swiftly by the loss of access to Slack and email – leaving little chance to react or say proper goodbyes, and taking a significant emotional toll on those let go.

Workers at Bethesda Game Studios Austin and ZeniMax Online Studios, both unionised since 2024, are now negotiating severance and possible re-employment through bargaining committees, while rallies have been held outside studio buildings across North America. Under the US WARN Act, affected staff at American studios continue to be paid until 4 September, giving the required 60 days' notice. Employees said rumours of cuts had circulated for weeks, referencing a Bloomberg report from 10 June, but many believed their work on high-profile franchises such as Skyrim and Fallout would protect their jobs.