Xbox Cuts 268 Jobs, Merges Studios Under Activision
Xbox has laid off 268 staff and is consolidating its studio network, with Activision taking over the next Halo title.
Key points
- Xbox has laid off 268 employees as part of a larger plan to cut 3,200 roles by the end of the fiscal year.
- Activision is now developing the next Halo title, while Ninja Theory faces closure after failed sale deals.
- Undead Labs has transitioned to a new publisher and will release State of Decay 3 on Game Pass.
Microsoft’s gaming division has announced the latest phase of its corporate restructuring, resulting in the loss of 268 jobs. This move follows a broader commitment made in July to cut 3,200 positions across the company. The latest reductions affect key teams, including those responsible for the Halo franchise and central management functions.
Beyond the layoffs, Xbox is fundamentally changing how it organizes its development studios. In a significant shift, Activision, which Microsoft acquired for nearly $70 billion in 2023, is now tasked with developing the next entry in the Halo series. This consolidation aims to reduce operational overhead and focus publishing efforts, though it marks a departure from the traditional structure of the franchise.
Studio closures and IP transfers
Not all studios are surviving the restructuring. Ninja Theory, the developer behind the Senua saga, is facing closure after two potential acquisition deals fell through. Conversely, Undead Labs, known for State of Decay, has successfully transitioned to a new publisher. According to gamedeveloper.com, the studio retains its intellectual property and funding, with its upcoming game set to launch on Game Pass.
Merging teams under new umbrellas
Xbox is merging several internal teams to streamline operations. Rare and World’s Edge are now operating under the Activision umbrella, while Bethesda will house Obsidian. Obsidian will continue working on existing projects, including a new Fallout title. Additionally, Playground Games and Turn 10 are being combined into a single studio dedicated to the Fable and Forza franchises.
These changes are part of a strategy to shrink the company’s operating footprint. By grouping studios under larger entities like Activision and Bethesda, Microsoft hopes to improve efficiency. However, critics have raised concerns that frequent layoffs and structural shifts may hinder creative output and employee morale.
Blizzard remains unaffected for now
Despite the widespread changes, Blizzard Entertainment appears to be outside the immediate scope of these cuts. An internal communication confirmed that the World of Warcraft developer is not impacted by today’s announcements. However, the phrasing used by leadership leaves the door open for future adjustments, reflecting the ongoing uncertainty within Microsoft’s gaming division.
