Microsoft gaming layoffs affect 158 ZeniMax staff in Texas and 52 Obsidian workers in California
Microsoft's Xbox division will cut 158 positions at ZeniMax facilities in Texas and 52 roles at Obsidian Entertainment in California, part of a broader plan to eliminate 3,200 gaming jobs by mid-2027.
Microsoft announced that its Xbox gaming division will eliminate 158 jobs at ZeniMax locations in Texas and 52 positions at Obsidian Entertainment in California. The Texas cuts include 96 roles at the Richardson office, 40 remote positions linked to that site and 22 jobs in Austin, affecting staff from id Software and other Bethesda teams. The California layoffs involve 43 employees at Obsidian's offices and nine remote workers in the state.
The reductions are part of a 1,600-person layoff announced by Xbox chief Asha Sharma, which contributes to a broader target of cutting 3,200 gaming-division jobs by June 2027. Sharma said the moves reflect an "unhealthy Xbox business" and a 20% downsizing of the Xbox gaming team.
A WARN notice filed in Texas indicated that most of the 158 affected workers – about 146 – are represented by the Communication Workers of America, and the company will negotiate termination dates with the union. The Texas roles being eliminated span gameplay designers, engine programmers, QA testers, a senior skybox artist and producers. In California, the positions cut include art directors, a recruiter, a narrative designer and area designers.
Separate WARN filings show that Microsoft also laid off 605 employees in Washington state, covering both gaming and non-gaming functions, though specific locations were not disclosed. The Texas and California layoffs are scheduled to take effect on September 4.