Virtuos, the global co-development studio known for high-profile remasters and technical support on AAA titles, is undergoing a sharp and sudden contraction. According to journalist Gauthier “Gautoz” Andres (@gautoz.cool) in a Bluesky thread that began circulating late Tuesday, the studio is preparing to cut around 300 jobs—roughly 7% of its total workforce. While the majority of those layoffs will reportedly hit its China operations (roughly 200 positions), teams across Europe and North America are also expected to be affected, including the French studios behind The Elder Scrolls IV: Oblivion Remastered.
This is more than a cost-cutting maneuver. It’s another sacrifice on the altar of AI, a industry-wide set of layoffs that Microsoft is spearheading. Virtuos is just another company following the charge.
From Support Studio to Headliner—At a Cost
Founded in Shanghai in 2004 by ex-Ubisoft exec Gilles Langourieux, Virtuos built its name as a reliable outsourcing and porting partner for the biggest names in the industry. Their résumé includes polished upgrades of blockbuster titles and behind-the-scenes work on games you’ve probably played without knowing who helped finish them.
But in recent years, Virtuos has been trying to level up. Oblivion Remastered and Metal Gear Solid Δ are meant to be calling cards—a bid to move beyond subcontracting and into more prestigious territory. Think Bluepoint Games, but with a broader global footprint.
The problem? That ambition came without a net. According to Gautoz, Oblivion’s development pushed teams past budget constraints in pursuit of “overquality”—with no royalties or performance bonuses baked into the contract. The game was never meant to be a cash cow, but a showcase.
The result is cutting costs in the same place everyone else is at the moment: trading people for AI. Today, Oblivion Remastered gets a polish pass with Update 1.2—adding difficulty sliders, stabilizing frame rate drops, fixing visual bugs, and resolving a parade of long-standing quest issues—and tomorrow that team is being gutted.
Grim Fallout
As we reported earlier this month, the pressure on mid-tier studios is increasing across the board. Microsoft, in particular, has begun quietly replacing entire QA and support teams with generative AI systems—a shift that is rippling across the industry, even outside Redmond’s walls. Insiders have called the move the “start of a new purge,” where creativity and craftsmanship are being sidelined in favor of speed and scale, AKA AI is entering the workplace.
Virtuos employees tell Gautoz they’ve begun receiving mandatory AI training, following a year of top-down presentations and low-key onboarding. It fits a now-familiar pattern: retrenchment, automation, and a polite internal script about “competitiveness.”
Workers Push Back
In Lyon, one of the most visible of Virtuos’ European studios, workers are already on strike. The protest isn’t just about the layoffs; it’s also about a creeping centralization of leadership across the French offices that employees fear will gut the local creative autonomy they’ve built.
The strike has two demands: stop the layoffs, and protect the studio’s future as something more than a regional satellite in a cost-cutting empire.
Losing the Room
What’s unfolding at Virtuos echoes the broader confusion within an industry stuck between with the growing pains of AI entering the workplace. Microsoft has pivoted, Virtuos is pivoting, and more will follow. Whether it’s pivoting toward a creative renaissance or a hollowed-out future of AI-assisted asset work remains to be seen.