id Software eliminated 136 positions in a single round of cuts tied to Microsoft's Xbox restructuring, according to documents filed with Texas workforce authorities, leaving the DOOM developer with roughly a quarter of the staff it reported at the end of last year.

The filings list 96 office employees and 40 remote workers affected. The Communications Workers of America reported id Software employed 185 people as of late 2024, a figure that puts the cuts at more than 70% of headcount.

What did the cuts hit?

The layoff list reached deep into the studio's engineering leadership. Two lead programmers and a technical director were among those dismissed, multiple outlets reported. Scott Miller, co-founder of 3D Realms, wrote that the id Tech team had been eliminated "or nearly entirely."

id Tech, the proprietary engine that has powered Quake, DOOM, and Rage, will nonetheless remain "a part of the future" for Microsoft's gaming division, according to sources close to Xbox speaking to This Week in Videogames.

What was id Software working on?

The cuts landed while the studio was still evaluating pitches for its next project slate. GamesBeat, citing current and former employees, listed four concepts under consideration before the layoffs:

• A new installment in the Perfect Dark universe
• Fury, an original action title in the John Wick mold
• Ironwood, a Western-survival concept built around robots
• A multiplayer or cooperative entry in the DOOM franchise

Fury has been shelved, GamesBeat reported. The other three remain in limbo, with no public commitment from Microsoft to a replacement title.

What triggered the cuts?

The proximate cause, current and former employees told GamesBeat, was a communication breakdown with corporate leadership. Studio management could not identify which goal Xbox was prioritizing: unit sales, Game Pass engagement, or engine technology investment.

That ambiguity reportedly shaped DOOM: The Dark Ages itself. Had the studio known revenue was the central metric, employees said, the team would have shipped multiplayer, a feature that might have pulled more buyers off Game Pass and onto the premium SKU. The game's revenue underperformed, with a significant share of the audience opting for the subscription route rather than the standalone purchase, employees said.

Current and former employees told GamesBeat they were stunned by the scale of the reduction. Several said it would have been better for id Software to leave Microsoft than absorb a headcount cut of this magnitude.

What remains unresolved?

• id Software's German staff. Microsoft has not finalized their status; German labor protections prevent the rapid separation executed in Texas, and further reductions remain on the table.
• Whether any of the four pitched projects survive in any form. Microsoft has not publicly committed to a replacement title at id.
• The structural future of id Tech under Xbox. Microsoft retains the engine, but the team that built and maintained it is largely gone, raising questions about who keeps the renderer, editor, and tooling current.

For Microsoft, the episode quantifies the cost of ambiguous portfolio guidance inside a multi-studio holding structure. For id Software, the open question is whether a studio now operating at roughly 30% of its 2024 size can carry both a flagship franchise and the stewardship of a licensed engine without one starving the other. Watch for Microsoft's next fiscal quarter update and any movement on the German headcount as the next concrete signals.