This week's devastating Xbox layoffs will have a "substantial and cascading effect" on Bethesda's development of The Elder Scrolls 6, multiple staff at the studio have told IGN.

Speaking on condition of anonymity to protect their careers, current and former staff have told me that job losses across Bethesda Game Studios locations have removed more than 50 employees, including "key, high-performing people in the trenches" building the company's long-awaited Skyrim successor. This in turn, they say, has shattered morale, raised the risk of future development crunch, and increased the likelihood that the game's already far-off completion date will be delayed.

Such is the strength of feeling among the tight-knit Bethesda team that, on social media, photos have been shared of multiple makeshift "Celebrations of Service" memorials displayed within the company's offices in Dallas, Texas, and Rockville, Maryland. These feature framed photographs of laid off workers arranged in the studio's common areas, alongside bouquets of flowers. At least one of these displays has now been dismantled under orders of the company's HR department.

"Their loss will have a substantial and cascading effect on the game and morale of this studio," one Bethesda staff member told IGN. "It's been a mix of every discipline: programmers, artists, and designers," said another. "One person who's been at the company since Morrowind was cut."

On social media, the Bethesda Games Studio Union has highlighted a post on the Xbox Player Voice feedback platform, which seeks to raise wider awareness of the job losses and demonstrate to Microsoft that fans are unhappy with the scale of layoffs now associated with their hobby. With 2,588 upvotes it is now in the top 20 Xbox user suggestions on the site, which Microsoft draws from to enact fan feedback on its console platform.

The layoffs are part of the 1,600 staff who lost their jobs this week as part of a brutal downsizing of its business under recently-installed CEO Asha Sharma. In an email sent to staff, Sharma called it the most "significant" restructure in Xbox history, insisting Microsoft’s gaming business "is not healthy." Overall, Xbox is losing about one-fifth of its staff as part of Sharma's push for growth.

A further 1,600 staff will depart the company over the course of this year as Xbox looks to become a leaner operation focused more fully on its biggest brands, such as Halo, Forza, Fallout and — yes — The Elder Scrolls. But these changes will still impact development of TES 6 negatively, staff believe.

"We were already running a tight ship and are worried about this delaying the game..."“

In an email to Bethesda staff sent following Sharma's memo, Bethesda boss Jill Braff said the layoffs and change in strategy "reflect the realities of our industry and business — and our responsibility to ensure Bethesda is operating from a more stable foundation."

"To be successful in the future, we need to change course," Braff continued. "We must strengthen our business, return to sustainable growth, and ensure we can continue investing in our franchises and our players. I know that doesn't make a day like today any easier." In order to do this, Braff said, Bethesda teams would now work more closely together and focus on the company's "strongest franchises" in order to better serve "our players and Bethesda as a whole."

IGN has already explored how the changes at Bethesda mean focusing on big hitters such as The Elder Scrolls and Fallout, leaving Starfield potentially out in the cold. With Microsoft planning to sell or close Arkane Lyon, Marvel’s Blade may fall by the wayside or be published elsewhere. The Elder Scrolls Online developer ZeniMax Online Studios has already signalled content roadmap changes with fewer staff following the layoffs. Meanwhile id Software, developer of the Doom games, has suffered significant cuts. MachineGames has survived the cull, with a new Wolfenstein game pretty much an open secret at this point. But it’s looking increasingly unlikely that Indiana Jones and the Great Circle will get the sequel it teased at the end of the game.

And as for The Elder Scrolls 6? While it remains one of the most-anticipated games on Xbox's upcoming lineup — perhaps the most anticipated — its development is also the source of concern, too.

"There is a fear that we are going to be replaced by cheaper, contracted labor, or we will hire folks to replace them that will need to be onboarded (our tools are proprietary, other devs aren't going to know how they work) resulting in more delays, and we'll need to crunch to make up the time," one Bethesda developer told IGN.

"We've all been very excited and hyped for TES 6 and this has had a crushing effect on morale," said another staff member. "We were already running a tight ship and are worried about this delaying the game (though a final release date was not yet chosen as far as we know)."

This week, it was reported that The Elder Scrolls 6 is still at least two years away from launch, despite the fact it was originally announced some eight years ago. Bethesda released Starfield in the meantime, of course, but the long wait for a Skyrim follow-up has been a frustrating one for fans, with the franchise already skipping one full console generation in terms of mainline releases.

"It seems like the company wants to make up the loss in talent with outsourcers," one staff member said, pointing to a similar situation in the studio's "decimated" QA department, where work formerly undertaken by in-house employees has now been taken up by overseas staff at development outsourcing firm Keywords. "I've heard from my colleagues that they're already being asked to train new contractors. I have no idea how they'll continue updating Fallout 76 without hiring an external studio."

"You don't get to retire off your work at Xbox. Your time ends when you quit or are laid off."“

One staff member said they'd been told that colleagues from The Elder Scrolls Online studio ZeniMax Online Studios (ZOS) will now fill in gaps on The Elder Scrolls 6's development team, though it's unclear how this will be managed when publicly-available layoff notices show that ZOS itself has been massively downsized, with 212 staff laid off. Other teams in the ZeniMax family have also been gutted. Game Developer has reported that 136 of 185 full-time employees were laid off from id Software. Outside Bethesda, Bloomberg's Jason Schreier has said that Obsidian Entertainment has laid off a quarter of its staff. It has now been put to work on a new Fallout game, which Bethesda is said to be helping out with.

"I think the specter of layoffs is something we will face in perpetuity until we unionize," one Bethesda staff member said. Another revealed that "survivors" were told they were now safe from Sharma's further 1,600 cuts this year — though there's still a feeling of deep concern that these won't be the end of Xbox's plans to downsize in future.

"The 'survivors' were told they're safe from those next 1,600 but it's not entirely reassuring," a laid-off staff member concluded. "Even if that's true, who's to say there's not another 1,600 next year after that? It's had the chilling effect of realizing you don't get to retire off your work at Xbox. Your time ends when you quit or are laid off, that's it."

Tom Phillips is IGN's News Editor. You can reach Tom at tom_phillips@ign.com or find him on Bluesky @tomphillipseg.bsky.social