Xbox confirms 268 more job cuts as its reset reshuffles Halo, Bethesda and Forza teams
Xbox is eliminating 268 roles across Halo Studios, other first-party studios and its central Xbox Game Studios functions as the company continues its Xbox reset. The latest announcement also moves Halo’s next game under Activision, folds Obsidian into Bethesda’s remit and combines Playground Games with Turn 10.
The changes are the clearest confirmation yet of what the reset means for Xbox’s studio structure. Microsoft said the cuts completed since July, including studio divestitures, take it roughly three-quarters of the way through the restructuring previously announced for its gaming business. They follow earlier reports about Xbox layoffs involving Blizzard and Halo Studios and the wider studio-consolidation warnings.
Xbox reset puts Halo under Activision
Activision will expand its remit to include World’s Edge and Rare, and will develop the next Halo title through a new purpose-built team separate from its Call of Duty plans. A smaller Halo Studios team will continue supporting the existing games and community.
Bethesda will take responsibility for Obsidian, which will continue its current projects, including Grounded and a new Fallout project made with Bethesda Game Studios. King will absorb Microsoft Casual Games, while Playground and Turn 10 will operate as one studio focused on Forza and Fable.
Ninja Theory now faces a proposed closure
Xbox also confirmed that Compulsion Games and Double Fine have returned to management with their intellectual property, back catalogues and runway funding. Undead Labs has completed a similar transition and will release State of Decay 3 day one on Game Pass with a new publisher.
The news is worse for Ninja Theory. Two separate agreements fell through, and Xbox will begin consultation with employees on a proposed closure while it continues to explore other options. Consultation with Arkane is expected to continue through the end of the year.
The announcement follows Xbox’s July plan to eliminate approximately 3,200 roles across FY27. That earlier memo described the business as overextended and promised fewer management layers and a narrower studio structure. The July restructuring announcement set out the scale; the new memo names the teams now carrying the work.
For players, the immediate changes are mostly behind the scenes. The next Halo will have a new internal home, State of Decay 3 remains tied to day-one Game Pass, and Xbox’s larger first-party portfolio is being organised around fewer operating units. The earlier Xbox reset plan remains the company’s wider explanation for the shift.
Does Xbox say that announced games are cancelled?
No. The memo changes which teams and publishing groups handle several franchises, but it does not announce cancellations of Halo, Grounded, the new Fallout project or State of Decay 3.
What happens to Halo under the new structure?
Activision will develop the next Halo through a new team separate from its Call of Duty plans, while a smaller Halo Studios group continues supporting existing games and the community.
Will State of Decay 3 still be on Game Pass day one?
Xbox says yes. Undead Labs has transitioned with a new publisher, and State of Decay 3 is still planned for a day-one Game Pass release.
