Recently, Xbox officially announced a new round of business restructuring plans. As a key part of this year's "Xbox Reset" reform, 268 positions will be eliminated. The layoffs cover Halo Studios, several other first-party development teams, as well as management and back-office functions within Xbox Game Studios.
In an internal memo, Xbox Chief Content Officer Matt Booty stated that since July, a series of adjustments including studio spin-offs and transfers have completed approximately 75% of the overall restructuring plan. In July, Xbox laid off 1,600 employees and plans to cut another 1,600 positions by the end of this fiscal year. The current layoff of 268 people is a continuation of this large-scale restructuring.
Core Studio Structure Changes
Halo Series Transferred to Activision:The next generation of Halo titles will be developed by a newly formed internal team at Activision, which operates independently from the Call of Duty development team. The original Halo Studios will not shut down directly but will retain a small team to continue maintaining existing Halo games and managing the player community, no longer leading the development of mainline sequels.
Rare and World’s Edge Under Activision Management:Classic studio Rare, along with the World’s Edge team responsible for the Age of Empires series, will have their management authority transferred to Activision.
Obsidian Entertainment Joins Bethesda System:Obsidian has officially been placed under Bethesda, where it will continue to advance its current projects, including a new Fallout project co-developed with Bethesda. The development and operation of existing titles such as Grounded remain unaffected.
Playground Games and Turn 10 Officially Merge:Two long-term partner studios have been merged into one, taking unified responsibility for the development of the entire Forza series and the rebooted Fable.
Casual Games Business Integration:King Studios takes over Microsoft Casual Games, integrating resources for casual game development and long-term operations from both sides.
Follow-up Progress on Studio Spin-offs
There is also new progress in the previously announced studio sales: Compulsion Games and Double Fine have completed their spin-offs and returned to full independence. Undead Labs has also completed its ownership transfer, with State of Decay 3 still launching day-one on XGP. However, negotiations for the transfer of Ninja Theory ultimately failed to reach an agreement.
The memo mentioned that the purpose of this restructuring is to reduce redundant business units, merge closely collaborating teams, concentrate publishing resources, and strengthen key IPs under its banner. However, this round of large-scale structural adjustments has also sparked controversy within the industry, leading to the departure of many senior developers. At this stage, the official has not released any list of cancelled projects, and specific future plans for each IP will need to await further announcements from Xbox.