Xbox Cuts 268 Jobs and Moves Halo Development to Activision in Studio Shakeup
Key Takeaways
- •Microsoft eliminated 268 Xbox roles on September 22, mostly affecting Halo Studios and central operations, bringing the division roughly 75% of the way through a planned 3,200-job reset announced in July 2026.
- •Development of the next mainline Halo game will shift to a newly formed team at Activision operating separately from the Call of Duty pipeline, while remaining Halo Studios staff support existing titles such as the 2026 release Halo: Campaign Evolved.
- •Activision President Rob Kostich has committed to delivering what he described as the most esteemed Halo title to date under the new arrangement.
- •The broader restructuring moves Rare and World's Edge under Activision, shifts Obsidian to Bethesda's management, and merges Playground Games with Turn 10 Studios.
- •Since closing its $69 billion acquisition of Activision Blizzard in 2023, Microsoft's cumulative companywide layoffs have reached approximately 44,000 positions.
Microsoft eliminated 268 positions across its Xbox division on September 22 and confirmed that the next mainline Halo game will be developed by a newly formed team at Activision, a move that removes the franchise from the studio that originally built it and places it under the publisher best known for Call of Duty.
The layoffs in context
Most of the 268 eliminated roles came from Halo Studios and Xbox's central operations functions, though the round represents only the latest chapter in a much larger restructuring. In July 2026, Xbox CEO Asha Sharma announced a "reset" targeting approximately 3,200 job cuts, equivalent to roughly 20% of the division's workforce. With this latest round, about 75% of those planned reductions are now complete, following an earlier wave over the summer that removed 1,600 employees — leaving roughly a quarter of the announced reset still to be executed.
The cuts also arrive amid a longer period of workforce contraction at the company. Since Microsoft closed its $69 billion acquisition of Activision Blizzard in 2023, cumulative layoffs across the company have reached around 44,000 positions.
Activision takes the wheel
Activision President Rob Kostich has committed to creating what he described as the most esteemed Halo title to date. The new Halo team at Activision will operate separately from the publisher's Call of Duty development pipeline, sitting alongside — but outside — the Call of Duty operation within the Activision Blizzard business Microsoft absorbed in 2023. Meanwhile, the remnants of Halo Studios will continue supporting existing titles, including the 2026 release of Halo: Campaign Evolved. The practical upshot: support for the current catalog stays with the original studio's remaining staff, while the next mainline entry will be built under Activision's management.
The Halo transfer may be the headline, but it is far from the only studio reorganization in this wave. Rare and World's Edge are also moving under Activision's umbrella, while Obsidian will shift to Bethesda's management and Playground Games is merging with Turn 10 Studios — meaning several of the division's studios will report into different parts of Microsoft's gaming organization than they did before the announcement.
Xbox Chief Content Officer Matt Booty framed the sweeping overhaul as a push toward operating fewer, more focused business units with deeper publishing expertise. Given the scale of the realignment still in motion, that description captures a division mid-transition, with the final shape of Xbox's development structure still to be drawn.
