Microsoft Cuts 268 From Halo Studios, Shifts Franchise to Activision

Microsoft has announced another wave of layoffs affecting 268 workers, primarily from Halo Studios (the renamed 343 Industries), which recently shipped Halo: Campaign Evolved. The cuts are part of the 3,200 job reductions Microsoft announced in July, with half already implemented at that time.

The changes mark a dramatic shift for one of Microsoft's most recognizable franchises. Halo Studios will move into a caretaker and support role for existing projects rather than leading development. The next Halo game will instead be developed at Microsoft-owned Activision by a purpose-built team, with Activision handling both development and publishing.

Activision president Rob Kostich said in a statement: "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."

The restructuring extends beyond Halo. Microsoft is consolidating its studio organization, with Rare (Sea of Thieves) and World's Edge (Age of Empires) now reporting to Activision. Obsidian Entertainment (Grounded, upcoming Fallout) will report to Bethesda. Microsoft Casual Games, which manages Minesweaker and Solitaire Collection, will report to King. Turn 10 (Forza) is merging with Playground Games (Forza Horizon, Fable).

Additionally, Microsoft disclosed that deals to sell Ninja Theory, developer of the Hellblade games, fell through. The UK studio now faces potential closure as Microsoft begins a consultation process. Microsoft is proceeding with selling Undead Labs, maker of State of Decay, back to its management.