Today, Xbox announced more layoffs and a continuation of its “reset” operation announced back in June.
In a message signed by Chief Content Officer Matt Booty, we read that 268 employees across Halo Studios, other first-party studios, and the XGS management and central functions layer of Microsoft have been laid off.
On top of that, World’s Edge and Rare will be shifted under Activision, which will also develop the next Halo game with a purpose-built new team separate from those working on Call of Duty.
Bethesda will absorb Obsidian that will continue to work on Grounded and its new Fallout game
King will absorb Microsoft Casual Games, while Playground Games and Turn 10 will merge into a single team focusing on the Forza and Fable franchises.
Unfortunately, we also learned that two attempted deals to divest Ninja Theory have not worked out, and Microsoft is about to begin consultations with employees to close the studio, while also exploring other alternatives.
Consultation with Arkane is still going on and should continue beyond the end of 2026.
According to Booty, this operation, alongside what we saw earlier this year, represents three quarters of the expected “reset,” so there could be more cuts incoming.
At the moment, the new CEO Asha Sharma has not publicly commented on this. We’ll probably hear something more from Microsoft CEO Satya Nadella during the financial results announcement in october, when he’ll doubtlessly try to spin it as a positive.
Of course, we hope that all the fomer Xbox developers impacted will manage to find new creative homes to express their talent soon.
