The Bethesda Game Studios Union has filed another legal complaint against Xbox, alleging that laid-off employees at Bethesda’s Montreal studio were offered only the minimum severance required under Canadian law without proper negotiations.

The complaint comes during Microsoft’s ongoing restructuring, which has already resulted in thousands of layoffs, major internal changes, and the cancellation or restructuring of multiple projects across Xbox’s first-party studios.

Union Accuses Xbox of Unfair Treatment

In a statement shared on Bluesky, the Bethesda Workers’ Union claimed that employees in Montreal were treated differently from what they had initially been told during the layoff process.

According to the union, affected staff members were originally informed that they would remain employed until September while severance packages were negotiated through the union.

However, the situation reportedly changed just days later.

Employees working on the Fallout and The Elder Scrolls teams allegedly received termination letters informing them they would instead receive only the minimum severance required by Canadian labor law.

The union also claims workers immediately lost access to employer-provided health insurance and other employment benefits.

Union Announces Legal Action

Following the announcement, the Bethesda Workers’ Union confirmed it had filed another legal complaint against Bethesda, arguing that the company continues to violate Canadian labor laws.

In its public statement, the union criticized both Bethesda and Xbox leadership, accusing management of prioritizing business interests over employees who helped build some of the industry’s biggest franchises.

The organization says it intends to challenge the company’s handling of the layoffs through legal channels.

Xbox Continues Major Restructuring

The dispute comes after Microsoft’s large-scale Xbox restructuring announced earlier this month.

The company has implemented widespread organizational changes, including:

• Thousands of layoffs across Xbox studios.
• Internal restructuring of several development teams.
• Multiple project cancellations and reorganizations.
• Changes to the management structure of first-party studios.

Among the reported changes, Double Fine is expected to operate independently once again, while Mojang will now report directly to Xbox CEO Asha Sharma as part of Microsoft’s revised leadership structure.

Xbox Focuses on Future Strategy

Despite the recent layoffs and restructuring, Xbox leadership has stated that the company is moving forward with a renewed long-term strategy.

Executives have recently emphasized the importance of investing in stronger first-party exclusives and believe the restructuring will better position Xbox for future growth.

Meanwhile, the legal dispute with the Bethesda Workers’ Union remains ongoing, with the outcome likely to be closely watched by both the gaming industry and labor organizations in Canada.

As of now, Microsoft and Xbox have not publicly responded to the union’s latest legal complaint.