Halo studios slashed as activision as Microsoft cuts 268 Xbox roles

Microsoft announced another round of layoffs Tuesday, September 22, cutting fewer than 600 roles worldwide, with 300 in Washington state.

The company has eliminated 268 positions across Xbox Game Studios, including Halo Studios, other first-party studios, and the division’s management and central teams.

Xbox Chief Content Officer Matt Booty said the moves bring the restructuring announced in July around 75% complete.

Booty wrote in a memo: “The goal is to strengthen our franchise and games by operating fewer business units, aligning groups that already work closely together, and focusing our publishing expertise.”

The cuts extend beyond gaming, affecting cloud, AI, marketing, and research teams as Microsoft keeps tight control on expenses while investing billions in AI infrastructure.

Under the reorganisation, Activision will take over World’s Edge and Rare and will develop the next Halo game through a purpose-built team separate from Call of Duty. A smaller team at Halo Studios will support existing games and the community.

Bethesda will absorb Obsidian Entertainment, King will take on Microsoft Casual Games, and Turn 10 and Playground Games will merge into one studio handling Forza and Fable.

Ninja Theory faces possible closure after two divestment deals fell through. Undead Labs has been spun off, with State of Decay 3 still launching day one on Game Pass.

Microsoft plans to eliminate about 3,200 Xbox roles, around 20% of the division, by the end of fiscal 2027, including 1,600 cut in July. Those cuts followed a broader reduction of 4,800 jobs worldwide, about 2.1% of its workforce. Microsoft, however, clarified that the eliminated roles “are not being replaced by AI.”