Microsoft Layoffs and Shutdowns Continue This August, Morale Low, Employees Set Up Giant Inflatable Rat to Protest Against CEO

posted by Roy Schestowitz on Aug 12, 2026

So yesterday another mass layoff was confirmed at Microsoft, which meant that excuses were running out. Previously, Microsoft tried to claim that studios having layoffs in August wasn't really layoffs... because those were "contractors" (a loophole that IBM too uses). We now see some more reports about this latest round of layoffs [1-2] and, speaking of studios, nothing demonstrates their anger better than what they did to the CEO [3-6].

One might assert there's a racial connotation there, but then again, Microsoft loves to frame any sort of resistance or protest to the self-destruction of XBox as racist and/or sexist. It serves to distract from the inevitable demise of Microsoft's gaming ambitions. The Japanese companies won. █

Related/contextual items from the news:

1. LinkedIn to close Israel R&D center, lay off dozens four years after Oribi acquisition

   The Tel Aviv center was established in 2022 after LinkedIn bought Israeli analytics startup Oribi for an estimated $80–$90 million; about 50 employees are believed to work there, with only a small business team expected to remain

2. LinkedIn Closes Israel Development Center

   The center operated as an independent entity despite LinkedIn being owned by Microsoft. The Israeli team was responsible for developing measurement tools and attribution solutions that allow advertisers and businesses on the platform to assess return on investment for marketing campaigns.

   The closure marks another significant layoff in Israel's tech sector following broader contraction across the industry over the past year.

3. As Xbox head Asha Sharma reportedly visits Bethesda HQ, workers put up red flags representing laid off staff and a giant inflatable rat outside

   It's probably a weird day to be working at Bethesda's Rockville headquarters. In a week's time, on August 18th, the Communications Workers of America have organised numerous rallies across the US and Canada in support of Xbox workers, 1600 of which may lose their jobs over the next year, on top of the 1600 who have already been laid off. Today, as shared by Game Developer's Chris Kerr, CWA union members have already initiated a protest outside Bethesda HQ in the form of a giant inflatable rat, and a huge number of planted red flags, each one representing a laid off worker, as Xbox CEO Asha Sharma reportedly.

4. The Elder Scrolls 6 demo had a surprise guest at Bethesda HQ: a giant inflatable rat set up by protesting employees to watch Xbox execs who oversaw "devastating layoffs"

   Today, Xbox CEO Asha Sharma got a "live playthrough" of The Elder Scrolls 6, offering exuberant praise of the upcoming RPG's scale and story. Some Bethesda workers took the opportunity to remind Sharma of the 3,200 employees that are being cut under her watch as part of Xbox's massive restructure.

5. In Protest Of Mass Layoffs, Bethesda Devs Greet Xbox Leadership With A Giant Inflatable Rat

   Workers at Bethesda’s Rockville, Maryland office 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, with another 1,600 folks to be laid off throughout the rest of the year, developers put up a giant inflatable rat, known affectionately throughout union organizations as Scabby.

6. Xbox CEO Asha Sharma Gushes About Elder Scrolls VI, Does Not Seem To Notice Giant Rat On Bethesda Office Lawn

   Today Xbox CEO Asha Sharma took a trip to Bethesda Game Studios in Rockville, Maryland. She was welcomed with open arms, of a sort.

   Those arms belonged to a giant inflatable version of Scabby, a rat unions often install near locations where they’re protesting against poor labor practices. This is relevant because Microsoft recently took its shearing scissors to Xbox, laying off 1,600 workers last month with another 1,600 to come at some currently undefined point (or points) in the future. Developers also planted red flags outside the studio, one to represent each laid-off Bethesda worker.