The union representing Bethesda workers has filed a formal legal complaint alleging the company violated Canadian labour law when it laid off staff at its Montreal studio last week, accusing the publisher of cutting severance to the absolute minimum and failing to bargain in good faith.
Union files complaint over "bare minimum" severance
Bethesda union OneBGS announced it has filed a legal complaint against the developer "for continuing to violate labour laws in Canada." The union claims that on the same day Bethesda published its roadmap for upcoming Fallout releases — July 17 — it also issued termination letters to Canadian employees at Bethesda Montreal who were affected by the recent round of Xbox layoffs.
"That same day, they told their laid-off Bethesda Montreal employees that they would receive the smallest severance legally possible without bargaining with the union," the union wrote in a statement. The letters reportedly offered eight weeks of pay in lieu of minimum legal notice, any outstanding vacation pay, and immediate loss of group health insurance benefits.
This directly contradicts assurances given during a July 6 video call, when employees were told they would remain employed until September while Bethesda negotiated severance terms with the union. "These letters stated that the Canadians are to receive the bare minimum in terms of severance," the union stated. "Bethesda and Xbox leadership depend on our labour to make them millions, and yet when we do, we are disposed of. The cycle of workers paying for the mistakes of management ends here."
Broader unfair labour practice charges against Microsoft
The Montreal complaint is part of a wider escalation. The Communications Workers of America (CWA) and CWA Canada jointly filed an unfair labour practice (ULP) charge against Microsoft and its subsidiaries, including Xbox, ZeniMax Media Inc, Id Software, and Bethesda Game Studios, earlier this week. The charge alleges the company "unlawfully" conducted layoffs without providing notice to or consulting recognised unions, despite being legally required to do so during ongoing collective agreement bargaining.
"The unions CWA and CWA Canada have jointly filed unfair labor practice complaints against Microsoft alleging the company has unlawfully fired people without giving notice to or discussing it with the union as the employer is legally obliged to do when we are in the middle of ongoing bargaining a collective agreement," CWA Canada president Carmel Smyth told Game Developer.
Xbox responds
In response to the allegations, Xbox told media: "We respect our employees' right to make their voices heard, and we recognise that this is a difficult time for many. We reached out to the union to begin effects bargaining and are committed to that process. We remain focused on supporting impacted employees through this transition while positioning the organisation for long-term strength."
The phrasing "effects bargaining" is notable — it refers to negotiations over the impact of a decision already made, rather than bargaining over the decision itself. The union's position is that the company was legally obligated to discuss the layoffs before issuing termination letters, not after.
Why this matters for the industry
The Xbox layoffs that began earlier this year have been among the largest in the company's history, cutting thousands of jobs across its game studios and publishing divisions. What makes the Montreal case different is the presence of a union — OneBGS was certified at Bethesda Montreal in 2022, making it one of the few unionised game development studios in North America.
This case tests whether union protections actually hold weight when the parent company decides to cut costs. If Microsoft is found to have violated labour law, it could set a precedent for how future mass layoffs are handled at unionised studios across the industry. If the complaint fails, it could embolden other publishers to treat union consultations as optional.
The broader trend of layoffs and labour pushback
2024 has been a brutal year for game industry workers. Layoffs have hit virtually every major publisher, from Electronic Arts to Sony to Microsoft, with tens of thousands of jobs lost. At the same time, unionisation efforts have gained momentum — workers at studios like Activision Blizzard and Sega of America have voted to unionise, seeking job protections in an increasingly unstable market.
The Bethesda Montreal complaint is a direct collision of these two trends. Management is cutting costs to satisfy shareholders and restructure for "long-term strength," while workers — now unionised — are demanding the legal protections they were promised when they organised. The outcome of this complaint will be closely watched by both sides.
Skepticism: Will the complaint actually change anything?
Labour complaints, even when valid, can take months or years to resolve. Microsoft has deep pockets and a legal team that can drag out proceedings. Meanwhile, laid-off workers lose their health insurance immediately, as the union noted. Even if the complaint succeeds, it may not restore jobs or provide meaningful compensation in time to help those affected.
There's also the question of whether "effects bargaining" — which Xbox says it's committed to — is enough. The union argues the company should have bargained before making the decision to lay off staff, not after. Canadian labour law generally requires employers to bargain in good faith over the effects of a decision, but the specifics of what that means in practice are often disputed.
What comes next
The ULP charges will be investigated by labour boards in Canada and the United States. If the complaints are upheld, Microsoft could be ordered to reinstate laid-off workers, provide back pay, or negotiate a proper severance package with the union. But that's a best-case scenario, and it's not guaranteed.
For now, the union is making its case in public, hoping that reputational pressure will force Microsoft to do more. "Bethesda and Xbox leadership depend on our labour to make them millions, and yet when we do, we are disposed of," the union said. The next few months will determine whether that labour actually has the power to push back.
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