Labor Unions File Charges Against Microsoft Over Layoffs

In a significant development, labor unions in the U.S. and Canada have lodged unfair labor practice (ULP) charges against Microsoft, the parent company of Xbox, concerning its recent mass layoffs. The National Labour Relations Board (NLRB) confirms that a ULP charge has been filed against Microsoft, including its subsidiaries such as ZeniMax Media and id Software. The unions allege that Microsoft failed to provide necessary information to the Communications Workers of America (CWA) and engaged in bad faith bargaining during this tumultuous period.

Amid these accusations, a number of employees from key studios, including Bethesda and id Software, have unionized under the CWA. The union claims that Microsoft has undertaken "coercive actions" by unilaterally altering employee contracts without proper communication. The CWA filed the ULP charge on July 15, 2026, with CWA Canada also preparing to take legal action against Microsoft for allegedly unlawfully terminating employees at Bethesda Game Studios in Montreal.

Carmel Smyth, president of CWA Canada, expressed concerns via email to Game Developer, emphasizing that Microsoft has not adhered to its legal obligations to discuss layoffs with the union during ongoing negotiations for a collective agreement. "The employer cannot arbitrarily change working conditions while it is engaged in negotiating with the union," Smyth stated. She affirmed the unions' commitment to pursuing legal challenges to defend the rights of affected employees.

A spokesperson for the CWA mentioned that Microsoft did not engage in "decisional bargaining" with the union before announcing the layoffs on July 6, leaving union members blindsided by the news. Microsoft aims to reduce its workforce by 3,200 roles in its video game division by the end of the current fiscal year, with significant cuts expected at subsidiaries including Obsidian and ZeniMax Online Studios.

Anonymous sources among the laid-off employees have voiced their frustrations, claiming that the layoffs have led to a loss of crucial talent within the studios. One source lamented, "Does Microsoft care? Absolutely not, they seem to make it as painful as possible for everyone involved."

In response to the layoffs, impacted Xbox employees, both union members and non-union workers, organized protests dubbed 'Save Our Devs.' Demonstrations occurred at several locations, including Microsoft’s headquarters in Redmond and ZeniMax’s office in Rockville, where over 150 attendees rallied in support of the cause. Union organizer and former Bethesda employee Simon Prefontaine remarked on the strong turnout, highlighting the community's outrage towards Microsoft's recent decisions.

Prefontaine also mentioned that their legal representatives in both the U.S. and Canada view the layoffs as illegal and are pursuing ULP actions against Microsoft in both countries. The commitment from the unions underscores their determination to reinstate their members and continue working on the beloved games.