Microsoft cuts 268 more Xbox roles as Halo moves to Activision

Microsoft will cut 268 more roles across Xbox as part of an ongoing restructuring that moves Halo to Activision and groups several studios together.

Xbox executive vice president and chief content officer Matt Booty set out the changes in a note to staff shared on the Xbox blog on 22 September 2026. The company confirmed the 268 job losses cover Halo Studios, other first-party studios, meaning teams owned by Xbox, and the management and central functions layer of Xbox Game Studios Eurogamer.

The reorganisation redraws reporting lines across the division. Rare and World's Edge will now sit within Activision's remit. Playground Games and Turn 10 will join together to focus on Forza and Fable. Bethesda will oversee Obsidian, which continues work on its current projects including Grounded.

Obsidian will also work with Bethesda Game Studios on a new Fallout project, according to the company note Xbox.

The future of Halo is changing hands. The next Halo game will be developed by Activision, led by a new purpose-built team separate from Call of Duty. A small remaining team at Halo Studios will stay on to support the Halo community and existing games in service.

Two studios face an uncertain future. Ninja Theory faces proposed closure after two separate agreements fell through, with Microsoft beginning consultation with employees. A separate consultation with Arkane Studios remains under way and is expected to continue through the end of the year.

The cuts follow a period of upheaval for the division. Asha Sharma became chief executive officer overseeing Xbox in June 2026 and has led an overhaul of the business, according to earlier reporting Bloomberg. In July 2026, Microsoft cut 3,200 roles in its gaming division, including 1,600 layoffs on a single Monday, as part of a wider plan to cut 4,800 jobs overall Reuters. Formal layoff filings at the time confirmed 213 jobs cut at ZeniMax Online Studios in Maryland and 52 Obsidian developers let go in California. Xbox had previously shut multiple studios in May 2024, including Arkane Austin.

For fans, this means familiar names will sit in new places. Forza and Fable share a home, Fallout brings two role-playing teams together, and Halo leaves the studio built to carry it.