Xbox's Latest Layoffs Gut ZeniMax Online, Former Elder Scrolls Online Designer Warns

Microsoft's latest round of Xbox layoffs has hit ZeniMax Online Studios hard enough that a former developer says there's barely a team left to keep going. According to reporting from PC Gamer, the studio behind The Elder Scrolls Online reportedly lost half its staff in the cuts, and the fallout is already spilling into public view.

Andrew Young, who worked as a content designer on Elder Scrolls Online at ZeniMax Online Studios from 2012 to 2024, posted a short thread on X venting his frustration over what happened to former colleagues and the game he helped build. "I'm just so angry today," he wrote, describing years of "blood, sweat, and tears" that went into the MMO. He also said the ESO team helped prop up other projects at the company that were struggling, without ever getting the resources it needed to keep pace with its own release schedule. "The team deserved much better," he wrote.

Microsoft's messaging around this week's layoffs emphasized that no studios were being shut down outright. But as PC Gamer notes, that framing doesn't say much about what actually happens to teams that get spun out into independence or handed to new owners, and it does nothing to soften the morale damage of gutting long-tenured development staff.

A rocky history, then a harder year

Elder Scrolls Online has never had the smoothest ride. Its 2014 launch landed with a thud, and while the game found its footing after shifting to the buy-to-play Tamriel Unlimited model a year later, it's spent much of its life as the quieter alternative to bigger MMOs like World of Warcraft and Final Fantasy 14: recognizable, respected in some corners, but rarely the center of attention.

2025 turned into a genuinely rough stretch for the studio. Just a year after a GDC talk touted ESO's surprising commercial success, game director Matt Firor, who also served as president of ZeniMax Online Studios, left the company. Firor later said the departure was a direct result of Microsoft's 2025 layoffs, which also killed off Project Blackbird, a new MMO the studio had been developing.

Now, a year after that upheaval, Microsoft has cut even deeper into the same team, and that's fueling worry about where the studio and its flagship game go from here.

What comes next is unclear

TESO community manager Jessica Folsom addressed the layoffs publicly, reaffirming the development team's commitment to the game. But she also said the previously announced roadmap for the game's new seasonal content structure "will be shifting." There's no confirmation of anything more drastic on the horizon, but the situation has drawn comparisons to Amazon's New World, an MMO that found modest success before Amazon shut it down anyway when the company's broader gaming ambitions didn't pan out.

Young's closing message on X captured the sense of loss among people who'd built the game over more than a decade. "I've been gone for a while, but talking to people today and realizing there's really no one left and no changing it now makes my heart ache," he wrote. "For the people, our game, who we were as a team and a studio. This is a serious loss, and I don't think people know how much."

For now, Elder Scrolls Online keeps running, and Microsoft insists the studio itself hasn't closed. But the gap between "the studio still exists" and "the studio still has the people who built the thing you love" is exactly what former staff like Young are pointing to. Whether the surviving team can keep the game's momentum going with half the hands it used to have is the open question hanging over ZeniMax Online now.