Microsoft Xbox layoffs trigger Quebec studio cuts and Bethesda protests

Microsoft announced a restructuring of its Xbox division that could affect up to 3,200 employees. The cuts include a dozen staff at Bethesda Game Studios in Montreal, who were notified of layoffs via video conference and will lose system access two months later. The move has spurred the OneBGS union, backed by the Communications Workers of America, to schedule coordinated protests at Bethesda offices in Montreal, Austin, Rockville and Maryland on July 15, demanding better severance, extended health benefits and priority rehiring.

The layoffs are part of a broader industry slowdown in Quebec, where more than 300 game studios employing 45 % of Canada’s developers generate over $1.4 billion annually. Companies such as Epic Games, Ubisoft, and other local developers have also shed staff in recent months, leading industry leaders to describe the situation as a “perfect storm.”

Meanwhile, Montreal‑based Compulsion Games, acquired by Xbox in 2018, avoided closure during the mass layoffs by negotiating its independence. The studio announced it is open to collaborations as an independent developer, signaling a different outcome within the same wave of Xbox restructuring.