Microsoft has confirmed an additional 268 layoffs at Xbox as it continues a substantial restructuring process affecting several first-party studios. The announcement reveals further studio consolidations, closures, and shifts in management with implications across the Xbox Game Studios portfolio.
These personnel cuts come after the mass layoffs announced in July by Xbox CEO Asha Sharma, which initially affected 3,200 roles. At that time, 1,600 layoffs were implemented immediately, with some studios such as Double Fine and Compulsion Games allowed to become independent again. The latest announcement signals further reductions and operational changes hitting 268 more employees across Halo Studios, other unnamed internal teams, and Xbox Game Studios’ management tiers.
Studio Reorganisation and Obsidian’s New Oversight
Xbox executive vice president and chief content officer Matt Booty detailed the restructuring in a post on the Xbox blog. Rare, known for Sea of Thieves, along with World’s Edge, the studio behind Age of Empires, have been moved to fall under the Activision umbrella. Meanwhile, Playground Games and Turn 10 Studios will combine efforts to focus on the Forza racing series and the Fable franchise. Obsidian Entertainment, currently engaged in projects like Grounded, has been reassigned to Bethesda for oversight and will collaborate with Bethesda Game Studios on a new Fallout project.
Additionally, development of the next Halo title has shifted to Activision, which will establish a new dedicated team separate from Call of Duty operations. Halo Studios will retain a smaller group responsible for supporting the existing Halo community and in-market games.
Studio Closures and Ongoing Consultations
The announcement confirmed that Ninja Theory, creator of Hellblade, is facing proposed closure after two previously attempted agreements did not materialise. Microsoft is currently consulting with affected employees while exploring further options. Consultation with Arkane Studios, responsible for Dishonored and Deathloop, is still ongoing and expected to continue until the end of the year.
Booty characterised these restructuring efforts as a move to strengthen Xbox’s franchises by reducing the number of distinct business units, improving the alignment of studios that collaborate closely, and concentrating publishing expertise within fewer groups.
The latest wave of layoffs and operational changes reportedly brings Microsoft approximately three-quarters of the way through the initial restructuring plan announced in July. Reports indicate that over 1,300 employees may still be affected before the process completes.
