Microsoft's Xbox Cuts 268 More Jobs, Hands Next Halo Game To Activision
· Free Press Journal
Xbox is eliminating another 268 roles as part of its ongoing corporate restructuring, the company confirmed in an internal memo. The memo, titled 'Continuing Our Reset' and authored by Xbox Chief Content Officer Matt Booty, was sent to Team Xbox employees globally as an update on the reset the company outlined earlier this year. The layoffs span Halo Studios, other first-party teams, and the management and central functions layer of Xbox Game Studios.
According to Booty, these cuts, combined with the studio divestitures completed since July, put Xbox roughly three-quarters of the way through the restructuring it had previously announced. That earlier phase, disclosed in July, was described internally as the most significant restructure in Xbox's history, with plans to reduce the team by approximately 3,200 people through fiscal year 2027, of which around 1,600 roles were cut immediately. The July round also saw Double Fine, Compulsion Games and Undead Labs spun off as independent studios.
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Halo development shifts to Activision
The most consequential change to come out of Tuesday's memo concerns the future of the Halo franchise. A purpose-built team within Activision will now develop the next mainline Halo game, rather than Halo Studios (formerly known as 343 Industries). A smaller team will remain at Halo Studios, but its role will be limited to supporting the existing Halo community and games already in the market. The new Activision team will operate independently of the group working on Call of Duty.
The reorganisation also expands the remit of studios including Bethesda, Activision and King, while consolidating Playground Games and Turn 10. Activision's expanded responsibilities will additionally cover World's Edge and Rare.
Ninja Theory faces closure, Arkane's future undecided
The memo also addressed the fate of two other studios. Booty said two separate agreements to sell Ninja Theory had fallen through, and Xbox is now proposing to close the studio altogether. Meanwhile, consultations over Arkane's future are ongoing and are expected to continue through the end of 2026.
Xbox is expected to hold a company-wide town hall on October 6, where employees will look back at the restructuring and discuss what the company describes as one of the strongest game lineups in its history.
A year of continuous cuts
Microsoft's gaming division has been in a near-continuous state of reorganisation since it closed its roughly $69 billion acquisition of Activision Blizzard King in October 2023, still the largest deal in the games industry's history. Layoffs hit Xbox studios in each of the years that followed, before this year's cuts were framed under the 'reset' banner that Microsoft has described as an ongoing, multi-phase process.