id Software Speaks of Chaos After the Xbox Layoffs

After Xbox announced yet another cut of 268 positions and a new reshuffling of studios, a current id Software employee described anonymously to Aftermath what the restructuring looks like from the inside. According to them, management has no coherent plan — there is only a demand for profit, and immediately at that.

«Everything is still very chaotic,» this employee says. «There have been attempts to explain things to the studios, but it's entirely corporate newspeak. I still don't believe they have a clear vision for the future. The only concrete thing that has been conveyed to us is that they want higher profit and they want it now.»

Next comes the matter of the plans handed down to the studios from above: «Aggressive targets are being set that would have been unrealistic even before the layoffs. To say that workers inside Xbox look at the future grimly would be putting it far too mildly. Every time we think morale can't sink any lower, but the obvious incompetence of Xbox leadership manages to push it down further.»

Anonymous sources for Insider Gaming describe a similar picture: people work with the feeling that they are walking on thin ice, and it still guarantees nothing. «It's clear that it doesn't matter who you are, how many years you've been here, or what you've accomplished. There's no logic to be seen in who gets kept and who doesn't — except salary size,» one of them said.

What exactly Xbox announced on September 22

The message to employees published on the Xbox site is signed with the name Matt. The company is eliminating 268 positions at Halo Studios, other in-house studios, and in the management and central layer of Xbox Game Studios, while also reshaping the structure of its divisions — in order to strengthen franchises and games with fewer business units.

• Activision gets Rare and World's Edge, and the next Halo will be made by a new, specially assembled team inside Activision, separate from the development and plans of Call of Duty. Halo Studios itself retains a small group to support released games and the community.
• Bethesda gets Obsidian: the studio will continue its current projects, including Grounded, and a new Fallout project together with Bethesda Game Studios.
• King takes over Microsoft Casual Games.
• Playground and Turn 10 are merging into a single studio around Forza and Fable.
• In August, Compulsion and Double Fine returned to independent management with IP rights, catalogs and funding for an initial period; Undead Labs was spun out on similar terms — State of Decay 3 will launch in Game Pass on release day, already with a new publisher.
• Both deals involving Ninja Theory fell through — a consultation with employees about the possible closure of the studio is beginning, while the company says it continues to look for other options. The consultation regarding Arkane will run until the end of the year.

The key phrase for those still working at Xbox: everything done since July, including the sale of studios, takes the company roughly three quarters of the way through the previously announced restructuring. Which means the remaining quarter is still ahead. A general all-team meeting is scheduled for October 6.

The haste shows in the details. A Halo developer was promoted and laid off in the same week. The story director of Gears of War: E-Day lost their job a few days after the game went «gold». The formal logic of the reorganization and the way it is carried out on the ground diverge.

What happened with id Software in July

The DOOM developers' reaction makes more sense if you remember what the studio went through two months earlier. In the summer the figure of 3,200 layoffs was cited; several months before that, Microsoft had already cut around 1,600 people.

id Software was hit by the layoffs then too: according to reports, the studio lost roughly half of its staff — more than 90 positions were involved, and the QA department suffered the most.

That same week, the studio's remaining employees noted that management had given them no coherent direction — and this came right after a crunch on a highly rated DLC. Later, employees repeatedly said that, despite management's statements, Microsoft did not understand exactly what it was cutting and inflicted irreparable damage on studios with decades of accumulated expertise and specialized knowledge.

The practical consequence is simple: QA and technical specialists are carriers of knowledge that cannot be restored by hiring within a quarter.

Why this is happening

The current wave is a continuation of a course that Xbox itself calls a «reset»: it includes layoffs, studio mergers, closures and sales. The strategic reversals fall in the recently begun era of Asha Sharma at the head of the gaming division: before her arrival the division had one plan, now it has another, and, as Aftermath notes, between those poles there may have been no long-term plan at all beyond «cut, cut, cut».

From an accounting standpoint the logic is coherent. From the studios' standpoint it looks different: franchises are shifted between publishers, studios are merged, while deadlines and targets remain the same with substantially smaller teams. It is precisely this gap that sounds in the id Software employee's words — there is communication, but no plan behind it. Against the backdrop of the bet on Game Pass, the buying up of studios, the enormous spending on Activision Blizzard and the current pivot toward AI, what is happening looks like a reaction to quarterly figures rather than a built-out strategy.

Judging by the phrasing about «three quarters of the way», another round is likely in the coming months, although some industry outlets allow that the final figure may fall short of the announced 3,200. For artists, animators and technical specialists this means a continued overheating of the labor market: entering it at the same time are people from Halo Studios, Ninja Theory, id Software and other teams with years of experience on major projects. For studios outside Microsoft this is a rare opportunity to hire such specialists, and if the trend continues, part of the accumulated expertise will likely flow to competitors and independent teams.

Community reaction

The discussion of the anonymous id Software employee's words on X has split, and the louder part is more skeptical than sympathetic. Under the most prominent retelling of the piece, the most prominent replies defend Xbox's new leadership: the chaos is called the inevitable price of a pivot, and the demand for profit an ordinary matter of business rather than proof that there is no plan. Part of the audience does not believe the anonymous source and openly suggests firing the speaker for the jab at the bosses. The other side — gaming commentators and people from development — believes that even if a shake-up was needed, id Software was treated too harshly. They find the employee's version convincing: after the layoffs the studios are given targets that were unachievable even before the dismissals, there is no clear future, and morale keeps falling. They separately point out that the team had just released a strong expansion and still lost most of its people.

«Just make games that sell. It isn't higher mathematics.»

— @Dreamd0nt (X)

«Is Xbox's new leadership incompetent — or did the changes it needs simply turn out to be too harsh? What Xbox was doing before clearly wasn't working. Asha and her team are trying to fix the entire business, and there's going to be chaos right now. But saying there's no plan is going too far.»

— @JellalVT (X)

«I understand that Xbox badly needed proper management, but what they did to id Software, and the way they did it, is monstrous.»

— @Septic_Sauce (X)

What lies behind id Software's condition: miscalculations by Microsoft's management, a bet on scale, the industry's general overheating?