In its ongoing effort to overhaul the Xbox division, Microsoft has unveiled additional studio reorganizations and workforce reductions, marking significant progress in the company’s largest restructuring to date. The most recent development—disclosed by Microsoft’s leadership—will impact 268 more staff members, underscoring persistent instability at a number of its flagship studios.
Xbox division layoffs increase as restructuring advances
This week, Microsoft verified that 268 additional employees will be let go as part of its continuing reorganization within gaming. These fresh layoffs arrive only two months after the previously announced 3,200 job cuts in July, during which 1,600 roles were cut immediately, with the remaining positions to be phased out as the restructuring continues.
The affected workforce now includes teams from Halo Studios, multiple undisclosed first-party development groups, and staff in Xbox Game Studios’ management and support divisions. Internal updates suggest that Microsoft has now completed about three-quarters of its planned restructuring, meaning that more than 1,300 jobs may still be eliminated before the company’s overhaul concludes.
Major changes for Xbox studios and projects
Microsoft has also initiated substantial realignments within several renowned Xbox studios, aiming to refocus on major franchises and enhance operational efficiency. Matt Booty, the Xbox executive vice president and chief content officer, outlined these adjustments as critical to hitting those goals.
Key details of these studio changes include:
- Rare, which created Sea of Thieves, and World’s Edge, behind Age of Empires and Age of Mythology, will now report to Activision for leadership and direction.
- Playground Games and Turn 10 Studios will merge their efforts, collaborating on both the Forza and Fable series moving forward.
- Bethesda has been tasked with direct management of Obsidian Entertainment; Obsidian will remain dedicated to projects like Grounded, while also partnering with Bethesda Game Studios on a future Fallout installment.
Moreover, responsibility for the upcoming Halo title will shift to Activision. This project will be developed by a specialized team distinct from the usual Call of Duty makers. Meanwhile, a smaller contingent will continue within the original Halo Studios, maintaining support and engagement for current Halo releases and their community.
Uncertainty looms for two major studios
The status of two top-tier Xbox studios remains unresolved. After two recent attempts to secure a future for the team failed, Ninja Theory now faces potential closure. This could have significant consequences for the team behind the celebrated Hellblade series, as company management has begun consulting affected staff and is evaluating alternative solutions.
With respect to Arkane, which produced Dishonored and Deathloop, Microsoft indicated that the evaluation process for the studio’s future is ongoing and is expected to continue through year’s end, leaving questions about Arkane’s long-term prospects.
Leadership sets priorities for a streamlined Xbox strategy
According to Xbox executives, these sweeping changes are aimed at “strengthening our franchises and games by operating fewer business units, aligning groups that already work closely together, and focusing our publishing expertise.” The consolidation is meant to simplify structure and boost the impact of core franchises.
With these updates, it is clear that Microsoft intends to wrap up the Xbox division’s restructuring in the near future. However, a number of employees and studios continue to face uncertainty during this transitional phase.