Xbox CEO Asha Sharma announces cuts affecting 3,200 employees across multiple studios
Category: Business
In a shocking turn of events for the gaming industry, Xbox has announced a major restructuring plan that will result in the layoff of 3,200 employees across various studios, including the iconic id Software. As seen in a trending post on r/gaming, the news has sparked widespread discussion among fans and industry insiders alike.
On Monday, new Xbox CEO Asha Sharma confirmed that 1,600 employees would be laid off immediately, with another 1,600 expected to follow in the coming year. This restructuring is part of a broader strategy that will see studios like Double Fine, Compulsion Games, Ninja Theory, Undead Labs, and potentially Arkane either become independent or find new management outside of Xbox.
Among the hardest hit is id Software, the studio renowned for creating the Doom and Quake franchises. According to an official WARN notice, 136 employees from id Software lost their jobs—96 based in Texas and 40 working remotely. As a result, the workforce at id Software has dwindled from 185 employees in December 2025 to just 49 remaining staff.
This restructuring comes just a day before id Software was scheduled to release its latest DLC, Doom: The Dark Ages' Revelations. The timing has raised eyebrows, especially considering the studio's recent successes and the significance of id Software in the history of video games.
John Carmack, co-founder of id Software, expressed his feelings about the layoffs, stating, "I'm saddened, but I can't muster anger or outrage over it." He acknowledged the challenges faced by id Software and suggested that from Microsoft's perspective, the studio may have been a marginal business. Carmack noted that the competition in the gaming market is fierce, with games needing to be beloved and financially successful to continue production.
He questioned whether alternative pricing strategies or marketing approaches could have yielded different results for id Software, indicating a lack of clear solutions and expressing hope that the studio will rally through this difficult period.
The layoffs have sparked discussions about the future of id Software and its legacy in the gaming industry. John Romero, another co-founder of the studio, expressed his sorrow for those affected and emphasized the importance of preserving id's history and legacy. He stated, "id's history is critically important to the history of games," highlighting the studio's foundational role in shaping the first-person shooter genre.
The impact of these layoffs extends beyond the individual employees; it raises concerns about the stability and direction of Xbox as a whole. With major studios being affected, industry analysts are questioning the long-term strategy of Xbox and whether these cuts will lead to a stronger or weaker gaming ecosystem.
As the dust settles from this announcement, several questions remain unanswered. Will id Software be able to retain its identity and continue producing beloved games? How will the restructuring affect the upcoming titles and projects in development? And what does this mean for Xbox's strategy moving forward?
With the gaming community closely watching, the next few months will be telling for both id Software and Xbox as they navigate these turbulent changes. The upcoming QuakeCon event, where many industry insiders and fans gather, will likely serve as a platform for discussions about the future of id Software and the broader implications of these layoffs.
This article is grounded in a discussion trending on Reddit. Claims from the original post and comments may not reflect independently verified reporting.