Xbox has eliminated 268 jobs across Halo Studios and other divisions as part of an ongoing restructuring plan, while shifting development of the next mainline Halo game to Call of Duty developer Activision. The cuts follow broader workforce reductions announced earlier this year by Xbox leadership.
Xbox confirmed the layoffs this week, noting that the cuts primarily strike Halo Studios, other first-party studios, and the XGS management and central functions layer. The workforce reduction is part of a broader reset initiated under new Xbox CEO Asha Sharma, who outlined plans to scale back headcount by up to 3,200 employees—representing 20% of total staff—over a one-year period.
Xbox Chief Content Officer Matt Booty informed staff in a memo that the latest actions bring the division roughly three-quarters of the way through previously announced restructuring.
Activision Takes the Helm on Halo
With Halo Studios facing downsizing, Microsoft has handed Halo over to Activision. The Call of Duty publisher will oversee future development of the series, though a small team at Halo Studios will remain in place to support the existing community and games currently on the market.
Booty stated that the next installment will be led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty.
“For Halo, our goal is clear: make the greatest Halo game ever, worthy of its universe and legacy, while staying true to what made players love it in the first place. It is a bold ambition, one that this franchise deserves. We have already begun assembling a purpose-built team, unique in capability and talent, ready and excited to deliver this next chapter with the community.”
Rob Kostich, Activision president
Activision’s expanded remit also extends beyond Xbox’s marquee sci-fi shooter. The publisher will now oversee Age of Empires creator World’s Edge and British developer Rare.
Sweeping Reorganization Across First-Party Studios
Bethesda is expanding its footprint to incorporate Obsidian, which will continue its current projects, including Grounded, alongside a new Fallout game developed in collaboration with Bethesda Game Studios. Meanwhile, King is absorbing Microsoft Casual Games to combine two global operations focused on casual design and live services.
Playground Games and Turn 10 are merging into one studio focused on the Forza and Fable franchises, formalizing a partnership that has lasted for more than a decade.
Compulsion and Double Fine previously returned to independent management with their intellectual property and runway funding in August, and Undead Labs has now completed a similar transition. That studio is partnering with a new publisher to release State of Decay 3
day one on Game Pass.
Uncertainty Remains for Ninja Theory and Arkane
Microsoft confirmed that two separate agreements aimed at divesting Ninja Theory ultimately fell through. Consequently, the company has begun consultation with employees regarding a proposed closure while examining alternative paths forward for the studio and its projects.
At the same time, discussions concerning French developer Arkane remain underway and are expected to stretch through the end of the year, leaving the long-term outlook for those teams unresolved as Microsoft works to conclude its corporate overhaul.