It’s also time to name the next Elder Scrolls game, and Xbox’s architect of Forza Motorsport is leaving.
It’s also time to name the next Elder Scrolls game, and Xbox’s architect of Forza Motorsport is leaving.
To anyone listening closely to what Microsoft CEOSatya Nadellahas been saying over the past couple of years, this week felt like the clearest sign yet that AI is about to fundamentally change the size of Microsoft’s workforce. Microsoft is now offering voluntary buyoutsto around 60,000 employeesacross the US, UK, Canada, and India.
It’s the first time the company has presented such an offer to so many employees, expanding greatly upon theretirement offerthat was limited to around 9,000 employees earlier this year. It’s all part of an ongoing effort to avoid reducing investment in AI infrastructure by lowering Microsoft’s operating costs and headcount.
“Our total people costs will go down, our cost per head will go up, and my GPU per researcher will go up,” Nadella saidon a podcastalmost two years ago, responding to a question about AI’s impact on headcount. That’s a financial way of saying Microsoft will have fewer people, but it will offer higher salaries and more tools and AI power to those who remain.
It also helps explain the continued layoffs we’ve seen at Microsoft over the past couple of years. Microsoft has been performing layoffs regularly over the past decade, but over the past couple of years, the layoffs andexecutive departureshave been significant.
These aren’t the annual layoffs of old; they’re now happening every few months. This week’s voluntary exit offer arrived just months after Microsoftlaid off 4,800 employees, cuts that impacted its Xbox and commercial sales teams the most.
For the first time in a decade, Microsoft’s overall headcount has also gonedown year over year. Microsoft now employs around 223,000 people as of June 30th, 5,000 fewer than the 228,000 people it employed in 2025. Microsoftlaid off 4 percentof its workforce in July last year, and it’s now offering voluntary buyout offers to around a quarter of its employees.
More than 30 percent of the 9,000 eligible employees accepted a retirement offer earlier this year, but that number will likely be far less for the company’s latest Voluntary Exit Offer. That’s largely because, according to sources familiar, the offer is practically the same as regular severance terms at Microsoft — cash based on time at the company, accelerated stock vesting, some additional subsidized health coverage, and several months of care…
But what makes this unusual is the scale of the amount of employees who have been offered this exit. Even if only 5 percent accept the offer, that’s still 3,000 employees. I understand eligible employees have until December to decide, so we won’t know the impact of this offer for a while yet. With rumors of more layoffs in November and January, the amount of employees who do accept will surely inform Microsoft’s numbers for its next round of cuts…
There are some, both inside and outside the company, who think Microsoft needs these cuts. “Microsoft needs fewer people,”saysMerill Fernando, a former Microsoft Entra product manager. “I’ve been on the inside. I’ve seen how things get built. Lots of small orgs. Layers on layers. Silos everywhere.”
Fernando paints a picture of a Microsoft where every organization “had its own priorities and its own decision makers,” so it’s hard to get the company to do anything collectively. It sounds a little like the meme where each organization in Microsoft is pointing guns at each other, competing instead of collaborating.
Nadella even addressed that meme last year ina podcastwith Stripe co-founderJohn Collison, acknowledging that the comic has defined Microsoft’s cultural narrative “more so than reality,” but that it had signaled some very real tensions inside the company. “In some sense, some of these divisional tensions are real issues that need to have tension. Social cohesion is not a goal, winning in the marketplace is a goal,” said Nadella.
The question now is whether Nadella can reshape Microsoft for the AI era without undoing the cultural transformation that helped define his leadership. A company that has shifted to bebuilt around empathyis now asking its employees to reckon with an AI future that could make many of their jobs unnecessary. How Nadella handles that transition will define his legacy as much as the growth and success he’s achieved over the past decade.
A few weeks ago I started hearing from Xbox employees thatDan Greenawalt, the longtime creative force behindForza Motorsport, is leaving after almost 27 years. Greenawalt is departing as the head of Turn 10 Studios, theForza Motorsportcreator that merged withForza Horizondeveloper Playground Games.
Playground Games studio headTrevor Williamsrevealed the news in a recent internal memo, seen byNotepad. “Dan Greenawalt has decided that this is the right time for him to retire from Microsoft,” says Williams. Greenawalt will stay on as an adviser to Williams and the newly appointed Playground Games chief operating officer, Michel Bastien, “while he transitions to his next phase.” Here’s part of Williams’ memo about Greenawalt:
It’s hard to overstate Dan’s impact over the past 27 years. From shipping Project Gotham Racing on the original XBOX in 2001 to leading the creation of Forza, founding Turn 10 Studios and appearing so many times on our E3 stage, usually making a dramatic entrance with a supercar in tow – and so much more – we owe tremendous thanks and gratitude to Dan. On behalf of both teams, I would like to thank Dan for his leadership, his support, and his par…
Microsoft revealed last month that it wasmerging its two Forza developersinto a single studio as part of amassive restructuring of Xbox. Both Playground Games and Turn 10 Studios have merged into just Playground Games. The studio now has two locations: Playground Games Leamington Spa and Playground Games Redmond.
With Greenawalt retiring and Turn 10 merged into Playground Games, it’s not clear if we’ll ever see Microsoft return toForza Motorsport. More than 70 people at Turn 10 Studios werelaid off last year, in a move that hit the vast majority of the studio. Over the past year, Turn 10 Studios has essentially been maintainingForza Motorsport, and now the remaining employees have moved to Playground Games to work onForza HorizonandFable.
It’s been more than eight years since Bethesdaofficially announcedthe existence of the sixth game in itsElder Scrollsseries. While there have been some debates aroundplatform exclusivityforThe Elder Scrolls VI, we’ve heard very little detail about the game that Bethesda has been working on all this time.
Sources familiar with Bethesda’s plans tell me that the Xbox-owned publisher is about to announce that the nextElder Scrollsgame will officially be calledThe Elder Scrolls VI: Sentinel. The announcement could come as soon as next month, during a period that will mark 15 years sinceThe Elder Scrolls V: Skyrimwas released.
Bethesda has been showing offSentinelgameplay in recent months, I’m told. Xbox CEOAsha Sharmagot a live playthrough ofSentinelin August, andshe praisedthe scale of the game and said “the story is even greater.”
While I’m only expecting a name reveal next month and nothing more, I’ve been hearing some additional details about the game. If you want to totally avoid spoilers about the game, then don’t read the next paragraph.
I understand thatSentinelwill be set in Hammerfell, a province in the Elder Scrolls universe that’s appeared inThe Elder Scrolls Adventures: RedguardandThe Elder Scrolls Online.Sentinelwill be the first game about the history of the Elder Scrolls, and help uncover the secrets of these mysterious ancient artifacts.
I’m always keen to hear from readers, so please drop a comment here, or you can reach me atnotepad@theverge.comif you want to discuss anything else. If you’ve heard about any of Microsoft’s secret projects, you can reach me via email atnotepad@theverge.comor speak to me confidentially on the Signal messaging app, whereI’m tomwarren.01. I’m also tomwarren on Telegram, if you’d prefer to chat there.