Microsoft cuts 268 Xbox jobs and reshuffles its biggest game studios

Microsoft is cutting 268 jobs across Xbox and reorganizing several of its major game studios as the company continues a broader restructuring of its gaming business.

Xbox Game Content and Studios president Matt Booty announced the layoffs and studio changes in an internal memo to employees. The cuts affect Halo Studios, other first-party teams, and management and central functions within Xbox Game Studios.

Booty said the latest cuts and studio divestitures bring Microsoft roughly three-quarters of the way through the restructuring announced earlier this year. The company cut 1,600 jobs in July and plans to eliminate 3,200 positions during the current fiscal year.

Alongside the layoffs, Microsoft is reshuffling several studios and franchises in an effort to reduce the number of business units and consolidate teams that already work closely together:

• Activision will take over World’s Edge and Rare and will develop the next Halo game through a new dedicated team separate from Call of Duty. A smaller team at Halo Studios will continue supporting existing Halo games and the community.
• Bethesda will oversee Obsidian Entertainment, which will continue working on its current projects, including Grounded, as well as a new Fallout game being developed with Bethesda Game Studios.
• King will take over Microsoft Casual Games, bringing the company's casual gaming operations under one organization.
• Playground Games and Turn 10 Studios will formally become a single studio focused on the Forza and Fable franchises.

Microsoft also provided an update on studios it has been spinning off. Compulsion Games and Double Fine returned to their management teams in August with their intellectual property, back catalogs and funding. Undead Labs has now completed a similar transition and will release State of Decay 3 through a new publisher, with the game still coming to Game Pass on day one.

The future of Ninja Theory, the Xbox studio behind the Hellblade series, is less certain. Microsoft said two attempts to sell the developer fell through, and it is now consulting employees over a potential closure while continuing to explore alternatives.

Microsoft is also reviewing the future of Arkane, the French studio behind Dishonored and the upcoming Marvel’s Blade. Consultations with employees are expected to continue through the end of the year.