Xbox Restructure Cuts 268 Roles as Halo Moves Under Activision

Xbox is continuing a sweeping internal restructuring that will eliminate 268 additional roles across its gaming organization, while also shifting responsibility for several of its best-known studios and franchises. The changes include a major new home for Halo: Activision will build a dedicated team for the franchise's next main game, while 343 Industries will remain in place as a smaller support group for existing Halo titles and the broader community.

The latest measures are part of the Xbox "reset" previously outlined by the company. Matt Booty, Xbox executive vice president and chief content officer, said the process is now approximately three quarters complete. The announcement combines layoffs, studio consolidation, consultation processes, and revised reporting structures across Xbox Game Studios, Bethesda, Activision, King, and Microsoft's central gaming operations.

For players, the most consequential news is likely the reorganization around Halo. For employees, however, the immediate impact is another round of job losses in an industry that has already experienced extensive instability. Xbox said its focus on the day of the announcement was supporting affected staff and treating colleagues with care and respect.

268 roles affected across Xbox's organization

The 268 eliminated positions span Halo Studios, other first-party teams, and the Xbox Game Studios management and central-functions layer. The company has positioned these cuts as part of the broader restructuring rather than an isolated reduction.

For useful background on this topic, read Xbox Cuts 268 Jobs as Activision Takes Charge of Next Halo Game.

Booty did not provide a studio-by-studio breakdown of every role affected. That leaves open questions about which individual teams have been most heavily impacted, how projects may change as staffing shifts, and whether further changes will accompany the remaining quarter of the reset still to be completed.

Large-scale organizational changes can be difficult to assess solely through a corporate outline. A studio merger or management realignment may not immediately alter a game already in production, but it can affect leadership, creative ownership, scheduling, hiring, and the teams responsible for post-launch support. The consultation processes now underway at multiple studios also mean some of the picture remains unsettled.

Xbox has indicated that it will bring its broader organization together at a town hall scheduled for October 6, where leadership plans to discuss progress and look ahead to its upcoming slate.

Activision takes on Halo's next chapter

Halo is moving into a different development structure. Activision will create a new, purpose-built group to oversee the next Halo game, while 343 Industries will retain a smaller number of employees focused on supporting existing Halo games and the franchise's community.

That distinction is significant. 343 will not lead development on a new Halo title under the announced plan. Instead, Activision will take charge of assembling a dedicated team intended to deliver the series' next installment.

Activision president Rob Kostich described the move as both an honor and a responsibility, emphasizing an ambition to make a Halo game worthy of the series' legacy while preserving the qualities that established its appeal. He said work has already begun to assemble the team for that next chapter.

No title, release window, platform list, or gameplay direction for the next Halo game was announced. It is therefore too early to determine exactly what an Activision-led Halo will look like, or how much continuity it will have with the work done by 343 across Halo 4, Halo 5: Guardians, and Halo Infinite.

Still, the decision signals a substantial change in Xbox's treatment of one of its defining properties. Halo has long been closely connected to Xbox hardware, PC releases, online multiplayer, and Game Pass. Putting future development under Activision adds another major franchise to the publisher's responsibilities following Microsoft's acquisition of Activision Blizzard King.

Rare and World's Edge join Activision

Halo is not the only Xbox property moving beneath Activision's umbrella. Rare and World's Edge, the studio associated with Age of Empires, will also join Activision.

Rare has one of the longest and most distinctive histories in the Xbox portfolio, with Sea of Thieves serving as its current flagship live game. World's Edge, meanwhile, has been central to the stewardship and growth of the Age of Empires series. The announcement did not specify how each team's daily operations, active plans, or future project pipelines will change after the transition.

Kostich welcomed both teams and pointed to the long-running impact of their games. However, no new Rare or Age of Empires projects were revealed alongside the organizational news. For now, the announcement is about reporting structure and internal consolidation rather than a release roadmap.

Activision's expanded group will consequently encompass a wide range of Xbox priorities: blockbuster first-person action through Halo, historical strategy through Age of Empires, and Rare's established portfolio. Whether these teams remain highly autonomous or increasingly share resources and infrastructure will be an important question as the new arrangement takes shape.

Obsidian joins Bethesda while continuing Grounded and Fallout work

Elsewhere in the organization, Obsidian Entertainment will join Bethesda. Xbox said Obsidian will continue working on Grounded as well as its previously announced new Fallout project.

The pairing makes thematic sense on paper. Obsidian has a history with the Fallout universe through Fallout: New Vegas, while Bethesda is the current steward of the franchise. Bringing the studio into Bethesda's structure may create a closer working relationship around Fallout, though Xbox has not detailed the nature, scale, timing, or platforms of Obsidian's newly announced project.

The continued mention of Grounded is also notable. It suggests the game will remain an active responsibility for Obsidian despite the studio's change in organizational home and its work on another Fallout-related title. As with the Halo announcement, players should avoid reading unannounced specifics into the restructure: Xbox has confirmed that the Fallout project exists, but has not supplied the kind of details needed to evaluate its scope.

Playground and Turn 10 merge around Forza and Fable-director-says-the-rpg-s-xbox-legacy-helped-sustain-its-long-development/">Fable

Xbox is also combining Playground Games and Turn 10 Studios. The merged operation will focus on both Forza and Fable, two franchises that represent very different parts of the company's lineup.

Turn 10 is closely associated with the simulation-oriented Forza Motorsport series, while Playground built its reputation on Forza Horizon before taking on development of a new Fable. Consolidating the teams could potentially give Xbox a larger shared base of technical and production expertise, particularly in areas such as driving technology, world-building, visual presentation, online features, and long-term franchise planning.

At the same time, a merger does not automatically answer how each project will be staffed or led. Forza itself contains distinct Motorsport and Horizon identities, while Fable is an action role-playing series with different creative demands. Xbox has not announced any release changes or additional game details connected to the merger.

King gains Microsoft Casual Games, while Ninja Theory enters consultation

Microsoft Casual Games will become part of King, further consolidating Xbox's mobile and casual-game operations. King is already a major force in that space, and the move places Microsoft's casual portfolio alongside a business built around long-running mobile titles and live-service expertise.

More concerning is the status of Ninja Theory. Two agreements involving the studio, known for the Senua series, have fallen through. Xbox said Ninja Theory is now entering consultation, a process that follows similar uncertainty at Arkane, which remains in consultation.

Consultation does not by itself provide a final account of a studio's future. It is a formal process, and the details announced so far do not establish what ultimate outcome will follow for Ninja Theory or Arkane. The situation nevertheless adds to the uncertainty facing employees and fans of both teams.

In contrast, Xbox said Undead Labs has completed a transition similar to the one previously taken by Compulsion Games and Double Fine, becoming independent and retaining its back catalog and intellectual property. Undead Labs will still release State of Decay 3 on Game Pass at launch. That arrangement indicates independence does not necessarily end a studio's commercial relationship with Xbox.

A reset still in progress

The scale of these changes underscores how much Xbox is reshaping its internal game-making structure. Some studios are being merged, some are moving under new publishing groups, some are becoming independent, and others face unresolved consultation processes. Meanwhile, 268 people are losing roles during the latest phase.

Xbox leadership has argued that the reset is intended to create a stronger future lineup. That outcome will ultimately be judged by the games that emerge from the new structure, the support provided to teams during the transition, and the degree of stability that follows for employees.

For now, the clearest concrete changes are these: Activision will lead the next Halo game; Rare and World's Edge are joining Activision; Obsidian is joining Bethesda; Playground and Turn 10 are merging; King is absorbing Microsoft Casual Games; and Ninja Theory and Arkane remain in uncertain processes. Xbox may be 75% through its planned reset, but the final portion still carries major consequences for both the people making games and the players waiting to see what comes next.