Microsoft Cuts 268 Xbox Jobs, Moves Halo Development to Activision

Microsoft has announced it is cutting 268 Xbox jobs and reallocating development of the upcoming Halo game to Activision as part of its ongoing gaming restructuring efforts. In an internal memo titled "Continuing Our Reset," Xbox Chief Content Officer Matt Booty outlined the cuts affecting Halo Studios, other first-party developers, and Xbox Game Studios management.

Microsoft confirmed the layoffs are part of a broader restructuring affecting around 500 to 600 employees across gaming, cloud, AI, and marketing. Activision will oversee Rare and World’s Edge and establish a dedicated unit to develop the next Halo game, while Halo Studios will focus on community engagement and support for existing titles.

Other changes include Bethesda absorbing Obsidian Entertainment, King taking over Microsoft Casual Games, and Playground Games and Turn 10 merging into a single racing studio. Microsoft's restructuring has also seen mixed results in its attempts to sell smaller gaming subsidiaries, with some acquisitions failing. The company is moving away from a structure based on largely autonomous studios toward centralized development under larger business units, aiming for more predictable production schedules and greater coordination across its franchises.

While this move aims to improve output and coordinate games more effectively, it may also reduce the creative independence of the individual studios behind Xbox's franchises. The immediate impact for players is a holding pattern, with Halo fans potentially facing a longer wait for the next mainline release as the new development unit is established.