id Software has issued a statement on the current state of the team and its game production capacities following the recent round of layoffs enacted by Xbox. A tenured gaming studio with a very long list of successful projects under its belt, id Software wasn’t expected to see a huge reduction in staff as part of the Xbox restructuring, but it ended up being hit particularly hard, to the point that some thought it was functionally done.
Xbox’s biggest-ever restructuring effort has not been kind to the studios actually producing the games. So far, Xbox has announced only 1,600 of its grand total of planned 3,200 layoffs, but the ripples of these decisions have already reverberated through the industry. Double Fine and Compulsion Games are actively transitioning back to being independent studios, Arkane Lyon is likely to suffer a similar fate, and Ninja Theory and Undead Labs are yet to find buyers at all. With more layoffs on the way, things are looking grim.
id Software’s Statement Says Not All Is Lost, the Studio is Trucking On
id Software is a seminal gaming studio with a rich history to it, but this didn’t stop Xbox from laying off a massive chunk of its workforce. While fans believed this to be the end for id, the team’s official statement on Xbox vehemently denies this is the case. “While our studio was impacted, those changes were spread across teams,” it says. “We still have the crew we need to build the games and tech we’re known for. The team today is about the same size we were when making DOOM (2016).” The statement also says id Software staff is currently focused on supporting one another and the impacted team members, with the implication being that more projects are currently being incubated regardless of the size of the team.
While it’s certainly great news that id Software isn’t being thoroughly scuttled, there’s no chance of its production pipeline staying the way it was with a substantially larger team. Projects are likely to be affected, to say nothing of tenured, veteran game developers that have now lost their livelihoods due to their publisher’s mismanagement. Whereas Xbox CEO Asha Sharma’s first 100 days were marked by a largely optimistic outlook, that grace period has now properly ended, with thousands of people in Microsoft’s gaming division being laid off.
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It had been unclear up until recently whether Xbox’s massive acquisition spree from years ago was a good thing for the industry or not, but there’s no doubt about it now. Public personalities like Ben Starr are criticizing Xbox for doing what it did in 2018, which was when it first acquired beloved gaming studios like Playground Games, inXile Entertainment, Obsidian, Undead Labs, and a variety of others. Many of those acquisitions seemingly haven’t panned out, and any future attempts at consolidation should be viewed with a critical eye from this point on, if there was any question about it before.
Something similar happened to Embracer Group in 2023, when the company laid off almost 1,000 employees following its own misguided acquisition spree. This was considered a massive fumble at the time, and it pales in comparison to what Xbox is currently going through. Even studios with premiere and highly anticipated games, like Ninja Theory’s Senua and Undead Labs’ State of Decay 3, which were prominently featured as part of the June 2026 Xbox Showcase, have gotten docked, and it’s unlikely that the second batch of layoffs will be any easier to parse through. id Software’s fate is, at least for now, not brought into question, but the same cannot be said for many other studios.
