Xbox eliminates 268 roles as part of broader studio restructuring

Xbox is eliminating 268 roles across Halo Studios, other first-party studios, and management functions as part of a major restructuring announced today. The cuts bring the company roughly three-quarters of the way through previously announced restructuring efforts that began in July, including studio divestitures.

The reorganization consolidates Xbox's studio structure into fewer business units. Activision will expand to oversee World's Edge and Rare, while also developing the next Halo title through a new, purpose-built team separate from ongoing Call of Duty development. A small team at Halo Studios will continue supporting existing Halo games and community engagement.

Other major changes include Bethesda expanding to include Obsidian Entertainment, which will continue Grounded and collaborate with Bethesda Game Studios on a new Fallout project. King will absorb Microsoft Casual Games, uniting the two organizations' live operations expertise. Playground Games and Turn 10 Studios are merging into a single studio focused on Forza and Fable, formalizing a partnership that has existed for over a decade.

Three studios divested earlier in the reset have concluded their transitions. Compulsion Games and Double Fine Productions returned to independent management with their intellectual property and back catalogs in August. Undead Labs has transitioned under similar terms and will release State of Decay 3 day one on Game Pass through a new publisher.

Negotiations with Ninja Theory failed on two separate occasions. Xbox will now begin employee consultation on a proposed closure while exploring other options. Consultation with Arkane Studios is ongoing and expected to continue through the end of 2026.