Xbox Cuts 268 More Jobs as “Reset” Restructuring Nears Completion

Xbox has announced the elimination of 268 additional roles across its organization, marking another significant chapter in the company’s ongoing “reset” restructuring. The layoffs were confirmed today through a post to the Xbox wire authored by Matt Booty, Xbox’s senior vice president of gaming, and will span Halo Studios, other first-party studios, and the XGS management and central functions layer. Booty described the cuts as part of a broader transformation of the company that he says is now roughly three-quarters of the way complete.

The restructuring has reshaped Xbox’s portfolio in ways that go well beyond the headcount reductions. Two studios, Compulsion Games and Double Fine, have already departed as independent companies, taking their back catalogs and intellectual property with them. Undead Labs has followed suit in a similar transition, and will launch its next title, State of Decay 3, on Game Pass at release. Meanwhile, two separate agreements involving Senua studio Ninja Theory have now fallen through, prompting the studio to enter consultation alongside Arkane, which remains in the process.

A New Activision and a Thinner Halo

Among the most consequential shifts is the consolidation of several studios under Activision. World’s Edge, the Age of Empires developer, and Rare will join the publisher, while Activision will assemble a purpose-built team to lead the next Halo game. This represents a dramatic departure from the franchise’s longtime home.

343 Industries, the studio that has defined Halo for over a decade, will retain only a small number of staff. Its role will shift to supporting existing Halo titles and the community, with no new Halo development in the works. The change has drawn attention from fans who have grown accustomed to 343 as the franchise’s creative heart.

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

Kostich’s statement, provided to Kotaku, also welcomed Rare and World’s Edge into the fold, expressing eagerness to collaborate with both teams. The remarks underscore Activision’s confidence in steering the Halo franchise into what it frames as a new era.

Studios Reorganized Across the Portfolio

The restructuring touches a wide swath of Microsoft’s gaming operations. Obsidian Entertainment is moving under Bethesda, where it will continue its work on Grounded as well as its previously announced new Fallout project. Microsoft Casual Games will join King, while Playground and Turn 10 will merge to focus on both Forza and Fable.

These moves signal a broader strategy of consolidating expertise and streamlining management as Xbox pursues its reset. The company appears to be grouping studios by genre and franchise rather than maintaining the more fragmented structure of recent years.

Today, our focus should be on supporting those affected and treating one another with care and respect. I will spend time with our studios over the next week.

Matt Booty, Xbox

Booty emphasized the human element of the transition, pledging to work directly with affected studios over the coming days. He framed the layoffs as an unavoidable part of a larger effort to build what he describes as one of the strongest game lineups in the company’s history.

Looking Ahead

The company will convene for a town hall on October 6, where Booty says the team will come together as an “ALL-XBOX” group to reflect on progress and look toward the future. Until then, the restructuring continues to unfold, with consultation processes ongoing for studios like Ninja Theory and Arkane.

For players and industry observers, the changes raise questions about the direction of long-standing franchises and the identity of Xbox’s first-party lineup. As the reset moves toward its stated completion, the coming months will reveal how these structural shifts translate into the games and experiences that define the platform.

For those tracking the details of the announcement, Booty’s full statement is available in his post to Xbox wire today.

Related coverage includes reports on Obsidian’s move under Bethesda as it works on its new Fallout game, as well as analysis of Activision taking over the Halo franchise and the fate of what remains of Halo Studios.