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Nearly two weeks after Microsoft announced its intent to lay off roughly 9,000 employees, yet another workplace massacre that saw deep cuts across the company’s gaming division, the ZeniMax Online Studios United union says it is now bargaining with the company “over how we move forward” following the cancellation of a new MMO that was in development at the studio.

The massive layoffs, which Xbox boss Phil Spencer announced on July 2 by talking about how great it’s all going for the gaming division, also resulted in multiple cancellations including Everwild, the Perfect Dark reboot, and a new MMO in development at ZeniMax Online Studios.

Subsequent reports claimed that game was not a typical fantasy MMO as you might expect from the studio behind The Elder Scrolls Online, but rather a Destiny-style shooter, codenamed Blackbird, that Spencer really liked. Not enough to save it, which makes me wonder what exactly his job as the top guy at Xbox actually is, but that’s a diversion for another day. In any event, ZeniMax was one of multiple Xbox studios hit hard by the layoffs, which according to a new statement from ZeniMax Online Studios United came completely without warning.

(Somewhat confusingly, given their similar names, ZeniMax Online Studios United is separate from the ZeniMax Workers United union: ZWU, formed in January 2023, represents QA workers at the studio, while ZOSU, which was announced in December 2024, includes “web developers, designers, engineers, and graphic artists.”)

“Earlier this month, Microsoft indefinitely shelved an unannounced MMORPG at ZeniMax Online Studios, a shock to the 222 ZOSU-CWA developers working on the project,” the union said in a statement posted to Bluesky. “It has been heartening and validating to see our game mentioned in the press and by players that would have loved to see the results of our work.

“Undoubtedly, a future has been stolen from many of us and our community will never experience an amazing game. However, despite discussions regarding the status of our employment, the fact is: we have not yet been laid off.”

The union said that while “something like a layoff is inevitable” for much of its membership, the fact of its existence has helped soften the blow for impacted employees by sharing resources and information, and negotiating the best possible exit terms for people put out of work.

“Where Microsoft has failed to support the talented craftspeople who have generated billions in revenue, our union has stepped up to provide clarity and support,” the union said. “It is true that a layoff may be in the future for some of our members. However, as a result of our organizing, we are able to ensure that those impacted will be able to depart with dignity.”

It’s a pretty clear sign that things aren’t going well when the only upside of your situation is that you’ll (hopefully) be allowed to “depart with dignity,” but at this point that at least puts laid-off employees ahead of Microsoft itself. Xbox, which by rights should be dominating the videogame business, is instead a confused mess, while Microsoft is betting the house on AI, plowing tens of billions of dollars—a planned $80 billion in 2025 alone—into a blind pursuit of a MechaHitler of its very own.

Andy has been gaming on PCs from the very beginning, starting as a youngster with text adventures and primitive action games on a cassette-based TRS80. From there he graduated to the glory days of Sierra Online adventures and Microprose sims, ran a local BBS, learned how to build PCs, and developed a longstanding love of RPGs, immersive sims, and shooters. He began writing videogame news in 2007 for The Escapist and somehow managed to avoid getting fired until 2014, when he joined the storied ranks of PC Gamer. He covers all aspects of the industry, from new game announcements and patch notes to legal disputes, Twitch beefs, esports, and Henry Cavill. Lots of Henry Cavill.