Matt Firor, boss of The Elder Scrolls Online developer ZeniMax Online Studios, has stepped down amid the cancellation of the studio’s unannounced MMO.
Sources close to the project told IGN that this MMO was a brand new IP unrelated to both Fallout and The Elder Scrolls, and that it had a sizeable team behind it. This team is now cut as part of the layoffs hitting Microsoft today.
In a memo to staff verified by IGN, Jill Braff, head of studio for Bethesda and ZeniMax, named Joseph Burba as Firor’s replacement as the new studio director for ZOS.
Dear Team,
Building on Matt’s note below, I first want to take a moment to acknowledge the changes happening today across Microsoft Gaming, including Bethesda/ZeniMax. Saying goodbye to talented colleagues and friends is painful. These individuals have contributed meaningfully to our studios, our games, and our culture. I want to thank them for the contributions they have made that shaped our journey as a team and as a company.
Today is a day to support one another. Please know we are working closely with impacted employees to ensure they are treated with respect and have our full support during these difficult times. If you have any questions or concerns, please contact your manager or HR support team.
I also want to share today that Matt Firor has decided to step down from his role as the head of ZeniMax Online Studios, effective July 14. I want to offer heartfelt thanks to Matt for his incredible leadership of ZOS over the last 18 years. As a driving force behind the success of The Elder Scrolls Online, Matt has grown the game into one of the most enduring and beloved MMOs in the industry.
I’m pleased to announce that Joseph (“Jo”) Burba will be taking over for Matt Firor as the new Studio Director for ZOS. With over 20 years in the industry, his extensive experience in live service multiplayer titles, and a strong background in various roles across ZOS the past thirteen years, Jo is well-prepared to lead the team into its next chapter.
Matt, Jo, and I will work together to finalize our transition plan – more to come soon. In the meantime, please join me in wishing Matt all the best and congratulating Jo on his new role.
Thank you to all of you for your dedication to Bethesda/ZeniMax, our community, and to each other.
Jill
The reference to Matt’s note here is the prior memo Matt Booty, head of Xbox Game Studios, sent to Microsoft gaming staff today confirming the cancelation of Rare’s Everwild and the Perfect Dark reboot, as well as the closure of Xbox studio The Initiative. Booty also mentioned the cancelation of “several unannounced projects” – the ZOS MMO was one of them.
IGN has reviewed Booty’s memo and published it in full, below:
Following Phil’s note, I want to share more about the changes to the Studios business units.
We have made the decision to stop development of Perfect Dark and Everwild as well as wind down several unannounced projects across our portfolio. As part of this, we are closing one of our studios, The Initiative. These decisions, along with other changes across our teams, reflect a broader effort to adjust priorities and focus resources to set up our teams for greater success within a changing industry landscape. We did not make these choices lightly, as each project and team represent years of effort, imagination, and commitment.
Our overall portfolio strategy is unchanged: build games that excite our players, continue to grow our biggest franchises, and create new stories, worlds, and characters. We have more than 40 projects in active development, continued momentum on titles shipping this fall, and a strong slate headed into 2026.
For those directly affected, we are working closely with HR and studio leadership to provide support, including severance, career transition assistance, and where possible, opportunities to explore roles on other teams.
To everyone across our studios: thank you. Your creativity and resilience continue to define who we are. I believe in the strength of our teams and the direction we’re taking on the path ahead.
– Matt
Microsoft has made a huge number of cuts to its gaming business since acquiring Activision Blizzard for $69 billion. It laid off 1,900 staff in January 2024, then made further cuts just a few months later when it closed Redfall developer Arkane Austin and Hi-Fi Rush developer Tango Gameworks. In September 2024, Microsoft cut a further 650 staff from its gaming business. And in May this year, Microsoft cut an eye-watering 6,000 staff, or 3% of its entire workforce. Today’s round of layoffs is the fourth to hit Microsoft’s gaming business in 18 months.
Speaking to IGN in June 2024, Xbox boss Phil Spencer said: “I have to run a sustainable business inside the company and grow, and that means sometimes I have to make hard decisions that frankly are not decisions I love, but decisions that somebody needs to go make.”
The cuts come hot on the heels of Microsoft’s confirmation that it plans to release next-gen Xbox consoles, and has a strong presence at video game show gamescom.
Photo by Christian Petersen/Getty Images..
Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at [email protected] or confidentially at [email protected].
