Xbox keeps cutting with 268 more layoffs, hands Halo to Activision

The Xbox bloodbath continues with another round of layoffs and an internal shuffle that puts the next Halo game in Activision’s hands.

In a public staff memo titled “Continuing our reset,” Xbox’s executive vice president and chief content officer Matt Booty outlined the changes. These include the elimination of 268 roles across Halo Studios and other first-party studios, Xbox Game Studios management, and the “central functions” team.

Next, Booty detailed how Xbox is reorganizing its studios. First, Activision will expand to include World’s Edge and Rare, as well as developing the next Halo title. Booty said development would be “led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty.” Meanwhile, a small team at Halo Studios will continue to support the current, in-market games.

Similarly, Bethesda will expand to include Obsidian, with Booty noting the studio will continue current projects like Grounded and the new Fallout game in collaboration with Bethesda Game Studios.

King, the developers behind Candy Crush, will expand to include Microsoft Casual Games.

Wrapping up the reorganizations, Booty said Playground and Turn 10 will merge into one studio focused on the Forza and Fable franchises.

Finally, Booty shared an update on Xbox’s studio divestitures, noting that Undead Labs transitioned “on similar terms” to Double Fine and award-winning Canadian developers Compulsion Games, but will still release State of Decay III day one on Game Pass.

However, Booty said that two agreements for Ninja Theory fell through, and Xbox will “begin consultation with employees on a proposed closure while continuing to explore other paths forward.” Xbox also expects consultations with Arkane to continue through the end of the year.

The new round of layoffs and restructuring comes as part of the 3,200 total cuts Xbox detailed back in July. At the time, Xbox said it was cutting 1,600 employees immediately and another 1,600 over the next 12 months. In other words, there are more cuts to come, which makes Booty’s sign-off about looking ahead to “one of the strongest game lineups in our history” feel particularly tone deaf.

Amid the cuts, Xbox CEO Asha Sharma keeps talking about growing Microsoft’s gaming division with goals of reaching 500 million people every day by 2030 — nearly five times what Sharma says Xbox currently reaches. But it’s not clear how the company could do that when it continues gutting studios and laying off the people who would make the games Xbox needs to hit those kinds of numbers.

Header image credit: Xbox