Microsoft's Xbox division has announced another round of job cuts, eliminating 268 roles across Halo Studios, other first-party teams, and Xbox Game Studios' management and central functions. The latest cuts are part of the company's ongoing restructuring of its gaming business.
The announcement was made by Xbox Chief Content Officer Matt Booty in an internal memo titled "Continuing Our Reset". According to Booty, the restructuring, including studio divestitures completed since July, is now roughly three-quarters complete.
Next Halo game moves to Activision
One of the biggest changes involves the Halo franchise. Microsoft has decided to move development of the next mainline Halo game from Halo Studios to a new, purpose-built team within Activision.
The new Activision team will operate separately from the teams working on Call of Duty. Meanwhile, a smaller team at Halo Studios will continue supporting the existing Halo games and the franchise's community.
Activision's expanded responsibilities will also include World's Edge, the studio associated with Age of Empires, and Rare, the developer behind Sea of Thieves.
More Xbox studios reorganised
The restructuring extends beyond Halo. Microsoft said Bethesda will expand its remit to include Obsidian Entertainment, which will continue working on projects including Grounded and a new Fallout project being developed with Bethesda Game Studios.
King, the company behind Candy Crush, will take responsibility for Microsoft Casual Games, while Playground Games and Turn 10 Studios will come together as one studio focused on the Forza and Fable franchises.
Ninja Theory faces possible closure
Microsoft also provided an update on studios it has been seeking to divest.
Two separate agreements to sell Ninja Theory have fallen through. The company will now begin consultations with employees over a proposed closure while continuing to explore other options for the studio.
Consultations regarding Arkane are also continuing and are expected to run through the end of 2026.
Meanwhile, Compulsion Games and Double Fine have returned to management as independent studios, while Undead Labs has also transitioned to an independent setup with a new publisher. State of Decay 3 is still expected to launch day one on Game Pass under the new arrangement.
Xbox restructuring continues
The latest 268 job cuts follow a much larger restructuring announced earlier this year. Microsoft had previously planned to reduce Xbox's workforce by approximately 3,200 roles through fiscal year 2027, with around 1,600 positions affected in the initial phase.
Microsoft said the broader changes are aimed at operating fewer business units, bringing teams that already work closely together under common structures and focusing its publishing expertise around major franchises.
The company is expected to discuss the restructuring and its future gaming lineup at an Xbox town hall on October 6.
