The Microsoft and Xbox layoffs have knocked the gaming industry off its feet, and matters continue to escalate. As part of the sweeping overhaul, layoffs at iD Software have now eliminated nearly half the team at the studio, with evidence to suggest that its QA team has been hit the hardest. The latest updates from Game Developer suggest that 136 roles have been eliminated at id Software, which includes 98 from Richardson, Texas, and 40 workers operating in remote roles. Aftermath added that a few workers from id Software’s small-scale Frankfurt office were also let go. The studio reassured gamers that, having now returned to its original size and operating philosophy, it is still sufficiently staffed to keep building “the great games and tech that have defined” it for the past 35 years. But the statement rings hollow among its audiences.
The right-sizing of operations isn’t a novel approach, but in light of Microsoft’s extensive cuts to its workforce, most view the id Software layoffs as another centrally led move that required justification in the aftermath of change. With some of the founders of id Software speaking up online to share their thoughts regarding the cuts, it remains apparent that there is considerable uncertainty regarding Microsoft’s ability to steer the Xbox gaming division proficiently. There has also been online chatter regarding the possibility of Microsoft selling off the gaming division entirely. These may just be unfounded concerns, but this external doubt is likely being echoed internally by employees as well, leaving a shaky operation in uncertain hands.
The Xbox layoffs have hit id Software, and while the company claims its fallen numbers are not concerning, the loss of senior talent could be. (Image: Pexels)
iD Software Layoffs Further Concerns Around the Future of Gaming and the Developers Who Stand at the Heart of It
Microsoft’s layoff plans have affected 1,600 workers across its gaming operation, and an additional 1,600 roles will be eliminated shortly. These cuts have taken many shapes and forms to realize an Xbox “reset” that is in the works, with the company simultaneously ridding itself of four studios by allowing them to go independent or operate under a new owner after they negotiated freedom over a hurried shutdown.
iD Software, best known as the developer of Quake and DOOM, did not make it out of the layoffs unscathed. Rumors indicate that the team has been reduced to a support studio, with internal sources at Kotaku suggesting that the entire id Tech engine team has been affected. These claims have been disputed, with newer reports clarifying that the scale of the cuts has not been brutal enough to bring operations to a standstill. An id Software statement also suggests that halving the team to the same size as it was during its glory days was all part of the plan.
“Thank you for all the support this week. While our studio was impacted, those changes were spread across teams. 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). We have always had a flat studio where everyone is a maker, and we will remain true to that philosophy moving forward,” the studio explained in a statement.
“We are focused on supporting each other and the team members impacted. We’re going to keep building the great games and tech that have defined us for the past 35 years, and we’re looking forward to seeing you at QuakeCon this August.” While the statement does attempt to move on from the id Software layoffs to bigger and brighter things, the workforce and its audience aren’t entirely on board with the ill-timed forward-looking statement.
Former id Software Founders John Carmack and John Romero Speak Up
With the id Software layoffs in particular, what stands out most is the public statements made by some of the founders of the game development studio. John Carmack, one of four founders of id Software, took on a more neutral stance on the cuts, despite reconsidering his previous statements about Microsoft’s ability to steward the id Software brand. “I’m saddened, but I can’t muster anger or outrage over it. I don’t have access to the books, but I suspect that Id Software was a marginal business from Microsoft’s perspective. I believe the reports that Minecraft revenues have been carrying several other studios,” he explained on Twitter/X.
He also added that the layoffs could “dampen the mood of the founder reunion at QuakeCon next month,” which appears to be an unexpectedly central point in these layoff discussions, primed to be a big moment for gamers awaiting the reunion. Speaking about the industry as a whole, Carmack explained that games need to be successful and not just well-loved in order to secure long-term success. For a shift in pace, he questioned whether there was anything else the company could have done before turning to layoffs. “You can’t rule out the possibility that executives are idiots, but that shouldn’t be your default belief. I don’t think there is any obvious path that would have doubled the revenue from Id games,” he explained.
Founder John Romero also commented on the id Software layoffs, but with a more sympathetic ear for those affected and a nod to the company’s relevance to the history of gaming. Romero Games was similarly hit by layoffs following Microsoft’s changes to its gaming strategy and funding negotiations last year, marking another way in which the tech giant’s strategy ripples through the industry at large.
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.
The people at id have done a great… pic.twitter.com/jxFFJ2bsFq
— John Romero 🤘🏽 (@romero) July 7, 2026
What are People Saying About the id Software Layoff?
The Xbox layoffs in general have drawn considerable criticism online, particularly in light of the new Xbox CEO Asha Sharma receiving a shiny additional role as a Federal Reserve task force advisor on Productivity and Jobs, merely days after eliminating thousands of jobs. While the Xbox CEO celebrates another win, some employees affected by the layoffs have shared the unfortunate news online, receiving many commiserative messages in exchange.
I am sorry to say I have been hit by the id Software layoffs. I hope everyone enjoys what we made with Revelations. Time to look for something new.
— Sean Connolly (@MaegicoPhdspc) July 7, 2026
Sadly after 12 Years the end of an era for me @ id software due to the layoffs.
I couldn’t be prouder being part of the incredible team at id & the contributions I was able to make to such a legendary studio & franchises.
Big thanks to Jason, Hugo & Marty for the opportunity. pic.twitter.com/eXpwN4tNwi— Denzil O’Neill (@DenzilONeill) July 7, 2026
One of the more alarming aspects of the id Software layoffs is the elimination of experienced workers who have spent years building the company up together. While the developer layoffs may bring the team back to DOOM (2016) size, the layoffs don’t just eliminate numbers but expertise as well. Industry veterans with years of insight and skills are now finding themselves out of work, unleashed onto a job market in an industry that appears bent on shrinking for profitability. Microsoft’s recent voluntary buyout plan, preceding the layoffs were similarly criticized for potentially targeting senior talent.
There are opportunities to be found, and their abilities may certainly open new doors at less volatile operations, however, there is a need for caution at the heart of the situation: organizations may be failing to acknowledge the drain of talent that is specifically equipped to eke out the success and productivity that they are keen on. The future of the gaming industry hangs in the balance, but this trend of layoffs isn’t a concern for the gaming industry or Microsoft alone. In an era where skill-based hiring and supervisory capabilities are more important than ever, letting go of experienced workers may be causing more damage to the industry than is apparent right now.
Affected by the id Software layoffs? Share your thoughts and experiences with us in the comments or write to us at anuradha.m@thehrdigest.com. Subscribe to The HR Digest for more insights on workplace trends, layoffs, and what to expect with the advent of AI.
