Bethesda Montreal Layoffs Draw Union Fury Over “Bare Minimum” Severance and Immediate Healthcare Loss

While Bethesda made headlines last week with a flurry of announcements about new Fallout projects, a very different story was unfolding behind the scenes. According to union OneBGS, employees at Bethesda’s Montreal studio who were laid off as part of the wider Xbox job cuts have been treated with what the union describes as outright disregard. In a social media post, OneBGS alleged that Microsoft informed the now-former employees they would receive the smallest severance package legally permissible.

“Last Friday, Xbox flooded news sites announcing every expansion, sequel, and remake they could,” the union wrote. “That same day, they told their laid-off Bethesda Montreal employees that they would receive the smallest severance legally possible without bargaining with the union.”

The union further claimed that Microsoft had initially told affected US and Canada-based employees that it would negotiate severance terms with OneBGS. However, on July 17th, the company allegedly reversed course and sent termination letters via email—contradicting what had been communicated in earlier calls.

“This was contrary to what they had been told in the Monday calls,” OneBGS explained. “These letters stated that the Canadians are to receive the bare legal minimum in terms of severance: eight weeks of pay in lieu of the minimum legal notice, any outstanding vacation pay, etc. They were to also immediately lose their group benefits health insurance.”

The union made its stance unequivocally clear: “We’re not going to take this lying down. We’ve filed yet another legal complaint against Bethesda for continuing to violate labor laws in Canada. Bethesda and Xbox leadership depend on our labor to make them millions, and yet when we do, we are disposed of. The cycle of workers paying for the mistakes of management ends here.”

In a since-deleted Bluesky post (via GamesRadar), lead character artist Ben Carnow echoed the union’s claims, stating that Microsoft had not negotiated with OneBGS despite being legally obligated to do so. “Folks lost their healthcare with zero notice,” he wrote. “Unconscionable.”

Bethesda’s Todd Howard recently addressed the layoffs in an interview, calling them a “really tough” experience for him and his colleagues. However, he also framed the cuts as part of a broader change that would allow the company to “focus best on the franchises and what we need to do to deliver for everybody.” That focus, it seems, is firmly on the future of Fallout and The Elder Scrolls.

The company has confirmed that Fallout 5 is in its long-term roadmap, with remasters of Fallout 3 and Fallout: New Vegas also in the works. A brand-new Fallout project with Obsidian Entertainment is reportedly in development as well, while Fallout 76 continues to receive support—most notably with the upcoming Raven Rock expansion.

On the Elder Scrolls front, Bethesda reaffirmed earlier this month that The Elder Scrolls 6 remains its “primary development focus today,” with “the majority of our team” now working on the long-awaited sequel. “With over 65 million copies sold, players are still exploring Skyrim 15 years later, but we know it’s been a very long wait for the sequel,” the studio said, adding that they’re “where we planned to be, loving how it looks, and playing it every day.”

For now, though, the headlines are split between ambitious future projects and a very present labor dispute. OneBGS has filed a legal complaint, and the union shows no signs of backing down. We’ll be following this story closely as it develops.