Workers at Bethesda’s office in Rockville, Maryland, decided to commemorate a visit from Microsoft leadership in a unique way. To protest the mass layoffs that have seen 1,600 people lose their jobs, and another 1,600 people to be laid off over the rest of the year, the developers put up a giant inflatable rat, known affectionately in union organizations as Scabby. NEW: CWA union members inflated a giant rat and displayed a wall of red flags representing laid-off Xbox workers outside Bethesda’s Rockville office. The protest was timed to coincide with a visit from Xbox CEO Asha Sharma, who is apparently at the studio today. — Chris Kerr (@kerrblimey.bsky.social) 2026-08-11T16:22:31.509Z In addition to inflating the giant, ugly, beloved rat, the developers took action both inside and outside the office. Members of the Bethesda Game Studios Union (OneBGS-CWA) placed 800 red flags outside the office, each representing a person who had lost their job since July 2025. “Each flag was a public reminder of how many people management removed from our teams, not just our colleagues and coworkers, but also our friends at the end of the day,” said Nathan Hahn, technical director and member of the Bethesda Game Studios Union in a statement shared with Kotaku. Hahn also said the action continued inside the office, with employees posting signs outside their cubicles. Then when management told them to take them down, they put up balloons. “We heard that Microsoft leadership was coming to our office this week and decided to make our presence visible in the office to show how our developers have been affected by these devastating layoffs,” Hahn said. Last month, Xbox announced it would lay off approximately 3,200 employees as part of its “great reset,” a move that CEO Asha Sharma said will return the company to profitability. Xbox has already suffered dozens of layoffs, project cancellations, and studio closures, and this latest round of layoffs has seemingly shaken the gaming organization to its core. Studios Double Fine and Compulsion Games, previously owned by Xbox, were spun off and became independent again, and both studios suffered layoffs as a result. The fate of Ninja Theory, Undead Labs and Arkane Lyon remains unclear amid reports that Ninja Theory and Undead Labs will be purchased by an as-yet-unknown buyer while Arkane is “looking at strategic options.” The layoffs have caused untold disruption among the developers who remain at these studios, and they are fighting back in hopes of stopping the bleeding. Next week, on August 18, Xbox workers, in coordination with the Communications Workers of America, will hold demonstrations across the United States and Canada to protest the layoffs and demand fair contracts for union members that will likely include protections against layoffs. “We are mobilizing to fight these layoffs, not only to ensure that affected XBOX developers and testers are treated fairly, but to remind our company and game studios around the world that layoffs like this cannot continue,” Hahn said.
