Xbox Cuts 268 More Employees as Second Wave of Layoffs Reshapes Studio Structure

Xbox has officially confirmed a second wave of layoffs, cutting 268 employees across Halo Studios, other first-party studios, and XGS management and central functions. The announcement comes months after a July restructuring that resulted in 1,600 layoffs, with this second phase bringing Xbox roughly three-quarters of the way through its previously announced restructuring plan.

In a blog post, the Xbox team wrote: "We are eliminating 268 roles across Halo Studios, other first-party studios, and the XGS management and central functions layer. The actions completed since July, inclusive of the studio divestitures, bring us roughly three-quarters of the way through previously announced restructuring. 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."

The restructuring includes significant studio consolidations. Halo will move under Activision's management, with a small Halo Studios team remaining to support the Halo community. Activision will also now oversee Rare. Bethesda assumes control of Obsidian, King takes over Microsoft Casual Games, and Playground and Turn 10 will merge into a single studio focused on Forza and Fable development.

CEO Asha Sharma previously described the broader restructuring as the most significant in Xbox history. The company stated that the decisions "do not reflect" the talent or dedication of departing employees, many of whom joined through studio acquisitions or were drawn to Xbox because of their passion for the industry.

The July round of cuts included the sale of four Xbox studios, an eight percent reduction in total Xbox staff, and the cancellation of some projects. That phase was followed by Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Labs departing Xbox.