Their company health insurance has been reportedly cut off already too

Image credit: Bethesda Softworks / Bethesda Game Studios

Last week, in the wake of yet another round of mass layoffs across the company, Xbox announced that Fallout 5 is in preproduction, Fallout 3 and New Vegas remasters are coming, and that Obsidian are working on a new Fallout project. If you were to ignore the 1600 staffers laid off and the ongoing call for a boycott due to Microsoft providing AI tech to the Israeli military as it continues to bombard Gaza and kill Palestinians, this would possibly be welcome news. But to make matters worse, OneBGS, the Bethesda Game Studios Union, have claimed that on the same day this was announced, laid off workers at Bethesda Montreal were informed that they would "receive the smallest severance legally possible without bargaining with the union."

In a post shared to the union's Bluesky account, they explained that on July 6th, "dozens of employees from Bethesda Game Studios across the US and Canada were told via video call that they were being laid off." They were also informed that they would be employed up to September "while the company negotiated severance with our union." Except, come July 17th, "the affected Canadian employees (part of the Fallout and Elder Scrolls teams) received termination letters via email."

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...

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— OneBGS - Bethesda Game Studios Union (@bethesdaunion.bsky.social) July 22, 2026 at 3:50 PM

This conflicted with what the staffers were told, with the email explaining that the Canadian workers would be getting the legal minimum when it came to severance, which constitutes "eight weeks of pay in lieu of the minimum legal notice," alongside outstanding vacation pay. To top it off, the workers were also told they would "immediately lose their group benefits health insurance."

As a result, OneBGS have filed a legal complaint against Bethesda for "continuing to violate labor law 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." The post also links to an Xbox Player Voice feedback page asking those upset by the news to let Microsoft know that these actions aren't acceptable.