Bethesda Union Challenges Layoffs That Came as Xbox Promoted Fallout’s Future
The Bethesda Game Studios Union says Canadian workers were dismissed on July 17 after being told they would remain employed through September while severance talks continued.
The Bethesda Game Studios Union says it is preparing another legal complaint over layoffs at Bethesda’s Montreal office, claiming Canadian employees were dismissed on July 17 despite being told they would remain employed until September while the union negotiated severance.
The terminations came on the same day Microsoft and Bethesda publicized several Fallout projects. Bethesda confirmed that Fallout 3 and Fallout: New Vegas remasters were in development, made an Obsidian collaboration official, and said Fallout 5 was in pre-production.
According to the union, dozens of Bethesda Game Studios employees in the United States and Canada learned about the layoffs during video calls on July 6. The affected workers were reportedly told they would keep their jobs until September, giving the union time to negotiate severance terms.
That arrangement changed on July 17, when Canadian employees connected to the Fallout and The Elder Scrolls teams received termination letters by email. The union says the letters offered eight weeks of pay in lieu of the minimum legal notice, outstanding vacation pay, and the immediate loss of group health benefits.
“Bethesda and Xbox leadership depend on our labor to make them millions, and yet when we do, we are disposed of,” the union said in its July 22 Bluesky message. It also said the layoffs happened without negotiated severance and accused Bethesda of continuing to violate Canadian labor laws.
Bethesda Games Studios’ Montreal workers are being treated especially poorly by XBOX and we won’t stand for it. Here are the details.If this upsets you let Microsoft know: feedbackportal.microsoft.com/feedback/ide…
— OneBGS – Bethesda Game Studios Union (@bethesdaunion.bsky.social) 2026-07-22T14:50:07.511Z
The Communications Workers of America and CWA Canada had already filed a joint complaint against Microsoft before the July 17 terminations. In comments to Game Developer, CWA Canada president Carmel Smyth said Microsoft had fired workers without notifying or consulting the union during collective-bargaining talks.
Smyth said the union would continue pursuing legal action when necessary. The Bethesda Game Studios Union now says it has filed another complaint over the Canadian dismissals, while the workers affected by the July 17 decision have lost their jobs and benefits earlier than they were told to expect.
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