Microsoft is advancing its major restructuring efforts within the Xbox division, with significant changes including mergers and closures among its studios, and the latest announcement of 268 additional layoffs.
Recent Layoffs and Studio Consolidations
Back in July, Xbox CEO Asha Sharma described the restructuring as unprecedented in its scale, with an initial layoff of 3,200 employees, 1,600 of whom were immediately let go, while others were allowed to separate and pursue independence, notably including Double Fine and Compulsion Games. Now, a further wave of job cuts is impacting 268 staff members across Halo Studios, various unspecified first-party studios, and positions within Xbox Game Studios that handle management and central operations.
Studio Reorganization Details
Microsoft is also undergoing a substantial reorganisation of its Xbox studios. Matt Booty, Xbox’s executive vice president and chief content officer, communicated that the restructuring involves strategic realignments. Rare, creator of Sea of Thieves, and World’s Edge, known for Age of Empires/Mythology, will be integrated under Activision. Additionally, Playground and Turn 10 will combine their efforts to concentrate on Forza and Fable franchises. Obsidian, responsible for Grounded and now collaborating with Bethesda Game Studios on a new Fallout project, will be overseen by Bethesda.
Future Game Developments
The development of the next Halo game will transition to Activision, which is forming a dedicated team distinct from those working on Call of Duty. Meanwhile, a small section of Halo Studios will continue to support existing Halo offerings and the community.
Impact on Remaining Studios
Booty has asserted that these strategic changes are intended to consolidate business units, enhance synergies within close-working groups, and harness Microsoft’s publishing capabilities to strengthen their gaming franchises. Despite these outlooks, some studios face uncertain futures. Ninja Theory, the studio behind Hellblade, is threatened with closure due to failed partnerships; however, Microsoft is still consulting with employees in search of potential solutions. Similarly, Arkane Studios, famous for Dishonored and Deathloop, remains engaged in consultation processes expected to persist until year’s end.
The changes announced bring Microsoft closer, by roughly 75%, to completing its ambitious restructuring plan. Yet, over 1,300 employees may still face termination as the process continues, underscoring the turbulence within the division.
Reporting based on coverage first published by eurogamer.net.