In July 2025, Phil Spencer mentioned that Microsoft’s gaming division has ’never looked stronger,’ yet that announcement coincided with a harsh wave of layoffs. Multiple studios, including ZeniMax Online Studios—the creators of The Elder Scrolls Online—were significantly affected. This included the cancellation of a game codenamed Blackbird and several job losses. Notably, the respected ZeniMax president, Matt Firor, departed after 18 years in the role.

Rich Lambert, the new Game Director at ZeniMax, addressed the emotional toll of this situation in an interview with GamesIndustry.biz. He described the atmosphere during layoffs as deeply challenging, stating, “It was super emotional, it was awful.” Lambert emphasized the responsibilities they hold towards their community and the need to continue progressing and enhancing the game despite these setbacks. He also hinted at future projects, indicating a shared desire within the team to create new games and not be limited to a single franchise.