Workers at Bethesda Game Studios greeted a visit from Xbox leadership this week with a giant inflatable rat. They also planted 800 red flags outside their Rockville, Maryland office.
The Bethesda layoffs protest coincided with a visit from Xbox CEO Asha Sharma. It became the latest sign of unrest among Microsoft’s gaming staff.
Members of the Bethesda Game Studios Union (OneBGS-CWA) organized the demonstration. The union wanted to protest mass layoffs at the studio. The cuts have already cost 1,600 people their jobs, with another 1,600 expected to be cut by the end of the year. Each of the 800 flags represented a worker let go since July 2025.
“Each flag was a public reminder of how many people management cut from our teams,” said Nathan Hahn, a technical producer and union member, in a statement shared with Kotaku. “Not just our colleagues and coworkers, but our friends at the end of the day.”
Rat outside, balloons inside during the Bethesda layoffs protest
Hahn said the demonstration did not stop at the giant rat, known widely in union circles as Scabby. Employees hung posters outside their cubicles inside the building. When management ordered the posters removed, workers replaced them with balloons instead.
“We heard that Microsoft leadership was coming to our office this week,” Hahn said. “We decided to make our presence visible at the office to show how our developers have been impacted by these devastating layoffs.”
Xbox’s “great reset” has already reshaped the roster
Xbox announced the layoffs, roughly 3,200 positions, last month. Sharma has called the cuts part of a “great reset” meant to return the division to profitability. The cuts follow months of earlier turmoil at Xbox, including canceled projects and shuttered studios.
Double Fine and Compulsion Games were both formerly owned outright by Xbox. Since then, both have been spun off into independent studios and have each carried out their own layoffs.
The situation at three other studios remains unresolved. Reporting indicates Ninja Theory and Undead Labs may be sold to an unnamed buyer. Meanwhile, Arkane Lyon is “pursuing strategic options,” according to the company.
A bigger rally is planned for August 18
The Rockville demonstration is a preview of a larger action. On August 18, Xbox workers will join the Communications Workers of America for rallies across the United States and Canada. Organizers say the events will call for an end to further layoffs and for contract protections covering union members.
“We’re mobilizing to fight back against these layoffs, not just to ensure impacted Xbox devs and testers get treated fairly,” Hahn said. “But to remind our company and game studios everywhere that layoffs like this cannot continue.”
Roughly 1,600 employees are still bracing for the second wave of cuts before the end of the year. For those workers, the August 18 rallies are the next chance to act. Organizers hope to push Microsoft and CWA negotiators toward a contract that includes layoff protections for union members.