This week’s industry-wide layoffs have hit Xbox hard, with 3,200 total job losses confirmed. While Microsoft has avoided closing any studios entirely, a darker reality is emerging for the teams that remain: many are being effectively gutted and repurposed as support studios.
id Software is among the hardest hit. The legendary developer, best known for the DOOM franchise, has lost 136 staff members this week. The impact on the studio's future has been immediate and severe, with one former employee telling Gamesbeat they are “not convinced there’s a viable path forward” for the team.
The shift in the studio's status has drawn sharp criticism from former staff. Ex-VFX artist Derek Best publicly stated: “Great job, Microsoft. Nothing says business success like nuking a team into the dirt and relegating them to support studio size while also throwing out massive technological achievements.”
New Projects Stalled
The timing of these cuts has stalled the studio's creative pipeline. Before the layoffs, id Software had been mapping out several new projects to follow the completion of the DOOM: The Dark Ages DLC. These included a Perfect Dark project and a title described as a John Wick-style gun-fu game. It is currently unclear if the studio retains the resources necessary to continue development on either title.
There is a growing sense of frustration within the team regarding Microsoft’s shifting mandates. While DOOM: The Dark Ages was developed as a single-player title, its day-one inclusion in Xbox Game Pass appears to have stifled its full-price sales. Some staff feel the studio was misled, noting that they might have pivoted toward multiplayer or live-service elements to bolster revenue had they known the company's long-term expectations for the title.
While DOOM: The Dark Ages launched on PS5 and PC alongside Xbox, the financial pressure on the studio has become impossible to ignore. Reports indicate that many of the axed staffers would have preferred for id Software to be sold or spun off entirely—similar to the path taken by studios like Double Fine or Compulsion Games—rather than remaining within the Xbox ecosystem as a diminished support entity.
As Microsoft begins the process of reassigning its remaining teams, it appears the company is moving toward a model where established developers are repurposed. With reports surfacing that Obsidian has been assigned to Fallout, the industry is watching closely to see which other high-profile teams will find themselves relegated to support roles in the coming months.