We’re currently witnessing a bloodbath in Microsoft’s gaming division. The company has confirmed layoffs affecting 3,200 employees across multiple first-party studios, with new Xbox CEO Asha Sharma calling it the most significant restructuring in the company"s history.
People were particularly concerned about id Software, the studio behind Doom, which wasn’t directly mentioned in Sharma’s letter. Unfortunately, recent rumors suggest that id Software appears to actually be one of the studios that got hit the hardest.
Multiple sources told Game Developer that roughly half of the Texas-based team has been let go, with one person putting the number above 90 layoffs. Another source said the studio"s QA department was hit especially hard, with staff describing it as decimated.
Pioneering game designer and founder of 3D Realms (ex Apogee Software), Scott Miller, said on X that most of the layoffs are coders. Whichever of these rumors proves to be true, it doesn’t look good for the developer of one of the most iconic shooters in history.
This post was about the insider news I got this morning that a majority of Id"s studio is being laid off, including most (if not all) coders. https://t.co/OcPrLgvYBG
— Scott Miller - Apogee/3D Realms Founder ☢️ (@ScottApogee) July 6, 2026
The cuts land at an awkward moment for the Doom developer. Id released the Revelations DLC for Doom: The Dark Ages just yesterday, and it"s still unclear how the reduced team will affect future entries in the franchise or ongoing work on the studio"s id Tech engine.
That"s not all, Game Developer also reports that one of Microsoft"s flagship studios and id Software"s sibling, Bethesda, is also being restructured to focus more on its main titles, like The Elder Scrolls, Fallout, and Wolfenstein. According to former Bethesda Studios project lead–Jeff Gardiner, per GameSpot, the studio lost up to 35 employees during this layoff round.
We"re witnessing tectonic movements across Microsoft"s entire gaming division. And we have yet to see what all these changes will bring to both gamers and (what"s left of) the staff.