Xbox cuts 268 roles and moves Halo development to Activision

Microsoft will cut another 268 roles at Xbox as part of a wider reset of its games business.

The cuts were announced on 22 September 2026 by Matt Booty, Xbox's executive vice president and chief content officer, in a post on Xbox Wire titled "Continuing Our Reset" Xbox Wire. Booty also set out the decision in an internal memo obtained by The Hollywood Reporter The Hollywood Reporter.

The 268 roles are part of a larger reorganisation. Xbox cut 1,600 jobs in July 2026 and had planned a further 1,600 cuts during its 2027 financial year, which ends on 30 June 2027 GameSpot. Booty said action completed since July, including studio divestitures, puts Microsoft about three-quarters of the way through those planned changes Xbox Wire.

This is not over. The three-quarters figure leaves further changes still to come under the plan outlined after July.

This round affects Halo Studios, other studios owned directly by Xbox — known as first-party developers — and management and centralised teams inside Xbox Game Studios GameSpot. Those central functions cover work that supports several teams, rather than a single game.

The most visible change for players concerns Halo. Xbox confirmed the next game in the long-running science-fiction shooter series will be made at Activision, not at Halo Studios GameSpot. Halo Studios is among the teams affected by the cuts. Xbox has not said the studio will close.

The reset follows a change at the top of the organisation. Asha Sharma took over as Xbox chief executive from Phil Spencer in 2026 GameSpot. Sharma has said Microsoft's bet on Game Pass, its subscription service that offers a library of games for a monthly fee, had not worked out and that the company's core business had weakened GameSpot.

For players, this means a familiar name in a new place. Halo continues, but development moves to a different studio.

Xbox has not given dates for the remaining planned cuts in the current financial year.