Xbox Cuts 268 More Jobs as Studio Reorgs Intensify
Microsoft's gaming arm announces further layoffs and structural changes, with major franchises like Halo moving under new management.
Key points
- Xbox has laid off 268 employees, bringing total planned cuts to about 75 percent of the intended reduction.
- Halo, Age of Empires, and Sea of Thieves are now managed under Activision, while Obsidian joins Bethesda.
- Studios like Ninja Theory and Arkane face uncertain futures, with some exiting the ecosystem and others in negotiation.
Microsoft’s gaming division has announced the elimination of 268 positions across its first-party studios. This move adds to the 1,600 roles cut earlier this year, signaling a continued reduction in headcount rather than a pause in restructuring.
According to Xbox executive Matt Booty, these reductions account for roughly 75 percent of all planned payroll cuts. This implies that additional layoffs are expected in the coming months as the company continues to reshape its workforce.
Major franchises face new management
The restructuring involves a significant reshuffling of development responsibilities. The Halo franchise, previously managed by a dedicated studio, is now under the control of Activision, the publisher behind Call of Duty. Halo Studios will continue to exist but will serve primarily as a support unit for this new arrangement.
Other notable changes include World's Edge, developer of Age of Empires, and Rare, creator of Sea of Thieves, both of which are now integrated into the Activision umbrella. Meanwhile, Bethesda has taken over Obsidian, the studio behind Pentiment and Avowed, formalizing a partnership that had previously been informal.
Some studios exit the ecosystem
Not all studios are being absorbed into new groups. Compulsion, Double Fine, and Undead Labs have left the Xbox ecosystem entirely. However, the situation is less clear for Ninja Theory, developer of Hellblade, whose agreement with Xbox has fallen through, leading to potential closure.
Arkane, the creator of Dishonored, remains in negotiations regarding a potential spin-off. These departures and unresolved contracts highlight the uncertainty facing several long-standing partners within the Microsoft gaming portfolio.
Restructuring impacts ongoing operations
Mashable reports that this year has been marked by significant turmoil for Xbox. Beyond the personnel cuts, the company has faced harsh limits on Game Pass streaming and a prolonged boycott of its brand. The combination of leadership changes and operational constraints has created a challenging environment for employees and fans alike.
The formalization of partnerships between studios like Playground Games and Turn 10, who will now jointly steward Fable and Forza, represents an attempt to streamline resources. However, the trade-off is reduced autonomy for individual studios, which must now align with broader corporate strategies.
