id Software staff cut by half as Microsoft initiates massive Xbox layoffs

The gaming industry is currently processing the aftermath of a massive workforce reduction initiated by Microsoft’s Xbox division. The restructuring involves the elimination of 3,200 roles across Xbox and various game development divisions. According to official announcements, 1,600 positions were cut immediately, with a further 1,600 departures scheduled over the next year. Among the most high-profile organizations affected is id Software, the developer behind the DOOM franchise and the proprietary id Tech engine.

New Xbox CEO Asha Sharma has characterized these measures as a necessary reset intended to address over-expansion and the creation of overly complex internal systems. This restructuring follows a series of previous layoffs at Microsoft throughout 2023, 2024, and 2025. The impact on id Software, located in Richardson, Texas, has triggered significant debate regarding the studio’s viability as a lead developer.

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Conflicting Reports on Studio Capacity

The scale of the reduction at id Software is a point of contention among industry observers and official filings. A WARN notice filed in Texas confirmed the termination of 96 onsite employees and 40 remote staff members. While some independent analysis has estimated the total losses could represent a reduction of 73.5 percent—based on a reported headcount of 185 employees as of December 2025—the studio and parent company Xbox have pushed back against the narrative that the team has been rendered incapable of future development.

In an official statement released on 10 July 2026, id Software asserted that its current headcount is comparable to the size of the team that developed the 2016 DOOM reboot. Furthermore, Xbox confirmed to Ign that dozens of staff members across multiple locations remain dedicated to the maintenance and development of the id Tech engine, directly refuting earlier reports that suggested the department had been dismantled. Despite these assurances, the studio currently has no formally announced projects following the release of the DOOM: The Dark Ages expansion, which launched on 7 July 2026.

Industry Reaction

The layoffs have prompted sharp criticism and reflections from veteran developers. Michael Maynard, a systems programmer who served at id Software for over 20 years before his departure, initially lamented the loss of staff as a squandering of technical expertise, noting that the team had maintained a standard of excellence across multiple titles. While Maynard later characterized his original comments as overly harsh, he maintained his sentiment that the reorganization represents a significant shift for a pioneering studio.

John Romero, a co-founder of id Software, expressed solidarity with those affected by the layoffs. In posts on Bluesky, Romero highlighted the emotional difficulty of witnessing the evolution of a studio after departing.

"I’m so sorry for everyone at id Software affected by these layoffs... I know what it feels like to leave id while id goes on. It’s a strange and painful thing to step away from a place that holds so much of your work, friendships and history."

Strategic Shifts and Future Outlook

The restructuring occurs alongside a broader strategic change within Bethesda. According to Bethesda boss Jill Braff, the company is moving away from a model of studio-led planning. Instead, the organization is pivoting toward a framework centered on its most prominent franchises, with a plan to align talent and resources to serve a unified content roadmap. This change reflects what Braff described as the realities of the business environment and a need for sustainable growth.

As the studio processes the organizational changes, it remains committed to its participation in QuakeCon 2026, scheduled for August. While id Software has not disclosed its long-term project pipeline, the studio has stated that it retains the capacity to continue building its own games and technology.