Four ZeniMax Online Heads Depart Amid Massive XBOX Layoff

There have been reported leadership shifts at ZeniMax Online Studios, the team behind The Elder Scrolls Online. According to sources, Joe Burba, a fourteen-year veteran of the studio who only took over as its head last July, is on his way out. He's not leaving alone either.

The Elder Scrolls Online executive producer Susan Kath, studio game director Rich Lambert, and production director Ala Diaz are all departing the company as well. Their names reportedly appeared on a WARN notice, which is usually how these things get publicly confirmed.

The four of them let staff at ZeniMax Online Studios know that leadership will pass to a new team of promoted studio employees.

That handover isn't happening overnight; it's expected to play out gradually over the next several months. In the notice reviewed by Game File, the outgoing leaders said they'd stick around during the transition to help make the handoff as smooth as possible.

This shake-up lines up with a lot of what's already been swirling around the XBOX layoffs conversation. The team behind Doom recently released a public statement noting that their current headcount is roughly in line with what it was when Doom (2016) was in development, seemingly trying to head off concerns about how thin their staffing has gotten.

ZeniMax Online Studios clearly hasn't been immune to the broader cuts either, and the leadership changes there suggest the impact runs deeper than just headcount. On top of that, Jason Schreier published a piece today digging into how the visible layoffs are really just one layer of this. Beyond the direct cuts, there's also been a reduction in freelance and contract work across the board.

Nintendo, for context, is known for not laying off full-time staff once they're hired, but even they've trimmed back on third-party support services, which has led to layoffs at some of the outside studios that support them. Crystal Dynamics is one example of a studio that's likely to see less funding going forward, since a lot of the projects they were supporting have lost investment.

Schreier's reporting touches on a frustrating side effect of all this.

A lot of these workers are bound by NDAs, meaning they can't openly talk about what they were working on, even after losing their jobs. That's not unique to Microsoft; it happens across the industry, but given how many people Microsoft has let go, it's created a situation where a huge number of talented people can't even promote or discuss the work they've spent years on.

Elsewhere, a different kind of story has been making the rounds. There's an update worth sharing on a story that's been circulating for a few days now. A user named Joshua Khane posted that Microsoft deleted his account and OneDrive data after confirming he was the rightful owner and that the account had been compromised.

He says twenty-five years' worth of data disappeared, along with thousands of euros spent on games and photos of his son as a baby. His frustration was pretty clear, pointing out that a company of Microsoft's size couldn't figure out how to restore a compromised account and instead just wiped it.

This kind of story is a good reminder of why relying entirely on cloud storage and digital ownership can be risky. When a company controls access to your data, and something goes wrong on their end, you're at their mercy to fix it. Losing something as personal as baby photos due to an account security issue is the kind of thing that sticks with people, and it's easy to see why this story spread the way it did.

Microsoft has since responded publicly, apologizing and saying that it's not the experience they want anyone to go through after their account gets compromised.

They said they've been working to restore access to the purchases in question and have reached out with next steps, asking the user to check his voicemail and inbox. So there's a decent chance this particular case gets resolved, but the core issue remains. Nobody should have to fight this hard to get their own memories and purchases back because of a security problem that wasn't their fault to begin with.

At this point, it's hard to trust that these companies will consistently do right by their customers on their own. Digital goods and cloud accounts exist in a kind of gray area where you're told you own something, but a company can still take it away or make it disappear. It really does feel like actual legislation will be needed to sort this out properly, and there are apparently early conversations underway about that already.

Moreover, it seems necessary to say something regarding all those layoffs at XBOX and other companies. Naturally, people are quite frustrated with all that's going on. It isn't about XBOX only, but about other studios as well, with Bungie being the one among them. Microsoft receives more attention than others since it has the greatest expenses in comparison to other publishers, despite being in the third place when it comes to consoles.

This company is employing more people compared to others, and it appears that big changes are coming soon.

The uncomfortable truth is that spending five to seven years developing a game, only to lose around forty million dollars on it, can't keep happening. Holding empathy for the people affected by these XBOX layoffs and recognizing that the business model behind three- to four-hundred-million-dollar game budgets isn't sustainable can both be true at the same time.

When a game with that kind of budget only brings in a fraction of that back, the odds of success on projects like that are just too low for the industry to keep operating this way indefinitely. XBOX is not the only one that has to face this issue; it is the whole industry, and it really remains to be seen how this is going to play out.

It is quite possible that the following years will see fewer huge investments and more small studios working on passion projects, just like it was the case with Palworld and Enshrouded from Keen Games. Right now, a lot of the numbers across the industry simply don't add up. Console prices don't make sense for the people buying them, and budgets for games have ballooned past what makes financial sense.

The staffing required to build a game that ends up losing tens of millions of dollars clearly isn't working either. It's shaping up to be a rough few years, and this moment feels like the reset that's been building for a while now. It's a tough situation across the board, but the industry does need to get to a place where the math actually works again.