Microsoft's Xbox division has begun a major round of layoffs — 1,600 employees immediately and 3,200 in total by the end of its fiscal year — and the cuts have landed hard on ZeniMax Media and its subsidiary Bethesda Softworks. Most notably, ZeniMax Online Studios, the developer behind the long-running MMO The Elder Scrolls Online, has reportedly been "gutted", with as much as half its team let go. The scale of the cuts signals a significant strategic shift in how Microsoft runs its games business and raises questions about the future of several established franchises.

Studios such as Id Software and ZeniMax Online have not been closed but are losing substantial staff, and ZeniMax will now concentrate on its biggest names: Doom, The Elder Scrolls, Fallout, Quake and Wolfenstein. In an internal email, Bethesda head Jill Braff said the firm would move away from planning around individual, largely independent studios towards a model focused on its strongest franchises. The future of ESO is described as "shifting" after Season One launches on 8 July, while Starfield was notably absent from stated priorities. The Elder Scrolls 6 remains in development but still appears years away, and the fate of Arkane Studios is unclear.