Xbox, continuing its large-scale workforce reductions, has announced job cuts including Halo Studios, formalizing that the company's restructuring efforts remain ongoing. With this adjustment, Activision will take charge of developing the new Halo title. Matt Booty, CCO of Xbox, described this process as "Continuing Our Reset."
On the 22nd, Xbox shared three additional updates through its official news channel as part of the previously announced corporate reset.
First is layoffs. Xbox revealed that it eliminated 268 jobs across Halo Studios, other first-party studios, and the Xbox Game Studios management division. CCO Booty stated that about three-quarters of the announced restructuring—including measures taken since July and studio divestments—has been completed, signaling that further organizational adjustments will follow.
Second is studio reorganization. Xbox explained that this action aims to enhance inter-group alignment by downsizing business units while strengthening franchise management and game publishing.
First, Activision will expand its operational scope to include World's Edge, developer of 'Age of Empires', and Rare, developer of 'Sea of Thieves'. Separate from its ongoing development of Call of Duty, Activision will develop the next Halo title through a newly formed team. Halo Studios will retain only a small team responsible for community management and ongoing support for existing titles.
Bethesda will also bring Obsidian under its wing. In addition to existing projects such as 'Grounded', Obsidian will continue working on the new joint 'Fallout' project with Bethesda Game Studios that was formalized in July. Consolidation is also taking place in the casual games division, with Microsoft Casual Games being integrated under King, the developer of 'Candy Crush'.
In addition, Turn 10, developer of 'Forza Motorsport', will be absorbed into Playground Games, developer of 'Forza Horizon', effectively merging into a single studio.
Third is studio divestment news. Following Double Fine Productions and Compulsion Games returning fully to independent management last August, Undead Labs is also slated to release 'State of Decay 3' through a new publisher. Conversely, Ninja Theory, developer of the 'Hellblade' series, has begun consultations with employees regarding a proposed closure after two separate acquisition negotiations fell through. Consultations with Arkane's French works council are expected to continue through the end of the year.
This restructuring is an extension of the reset reorganization announced in July by Xbox CEO Asha Sharma. The initially announced round of 1,600 layoffs included Obsidian, Bethesda, and id Software, while significant workforce reductions were also made within the Xbox platform team spanning hardware, software services, and Game Pass.
Overall, Xbox appears to be reallocating studio lineups that are underperforming or ripe for consolidation around major publishers like Activision, Bethesda, and King, thereby reinforcing its role as a publishing label. This strategic shift is also reflected in the publishing agreement signed with Kojima Productions on the 10th. With Xbox stepping in to publish 'PHYSINT' directly following Sony's withdrawal of support, analysts view this as Xbox scaling back the status of Xbox Game Studios while shifting its core identity toward publishing.
Meanwhile, CCO Booty announced that during a company-wide town hall meeting on October 6, the entire Xbox team will review progress made so far and share future lineup plans. A detailed blueprint for Xbox's reset efforts is expected to be unveiled on that day.
