Xbox Shake-Up: 268 Layoffs, Halo to Activision, and More

Microsoft announced 268 more Xbox layoffs, Halo moving to Activision, and a major restructuring that includes Bethesda absorbing Obsidian and Ninja Theory facing closure.

Did you think Xbox was done shaking things up? Think again. Microsoft just dropped another massive wave of changes, and it's a lot to take in.

First, the tough news: Xbox boss Matt Booty announced 268 more layoffs, hitting Halo Studios, other first-party teams, and Xbox Game Studios management. This comes after 1,600 cuts in July, and Microsoft says it's about three-quarters of the way through its planned restructuring. So more changes are likely coming. "I am deeply grateful for what our colleagues have built, and I know how difficult today will be for those leaving and the teams around them," Booty said. It's also been reported that Blizzard will face cuts next.

In a surprising move, Activision is expanding its role. It will now oversee Rare and World's Edge, and it's making the next Halo game with a "new, purpose-built team"—separate from Call of Duty. Meanwhile, only a "small team" at Halo Studios will remain, focused on supporting the Halo community and current games. Bethesda is also growing, taking on Obsidian, whose projects like Grounded and a new Fallout game will continue. King, the Candy Crush maker, will now cover Microsoft Casual Games, uniting two casual gaming powerhouses.

Over in racing, Playground and Turn 10 are merging into one studio to focus on Forza and Fable. "These two studios have been creative and franchise partners for over a decade, and today's changes will formally move their work into one team," Booty said. Undead Labs' State of Decay 3 has found a "new publisher" and will launch into Xbox Game Pass on day one, though the publisher remains a mystery.

On the closure front, Ninja Theory is in trouble. Booty confirmed that two separate agreements to sell the UK studio fell through, and Microsoft is now entering a UK-mandated consultation period regarding its proposed closure. However, Microsoft says it's still exploring other paths forward. Arkane Lyon remains under consultation per French labor laws, expected to continue through the end of the year.

Finally, Booty said there will be an internal town hall on October 6 to "reflect on our progress." He also claimed Microsoft has one of the "strongest game lineups" in Xbox history, but didn't share specifics. All of this is happening under new Xbox CEO Asha Sharma, who took over from Phil Spencer earlier this year and has already made drastic changes, including cutting Game Pass prices and removing new Call of Duty games from the service. She's also discussed a return to exclusivity for big games and outlined her plan to "reset" Xbox.

What do you think of these changes? Are you worried about the future of your favorite franchises? Let us know in the comments.