Xbox Announces More Job Cuts and Studio Reorgs, With Next Halo Game Developed by Activision

The new Xbox leadership continues to press the reset button after announcing 3,200 job cuts in July. In a new email to employees, Xbox Chief Content Officer Matt Booty said that the division was now “roughly three-quarters of the way through previously announced restructuring” after another round of 268 job cuts will impact Halo Studios, other studios, the Xbox Game Studios management team, and “central function layers.”

The initial 1,600 job cuts Microsoft announced in July affected studios such as id Software, Obsidian, Bethesda, as well as the Xbox platform team. At the time, the Xbox team also announced five studio divestitures, and Compulsion Games, Double Fine, and Undead Labs have already gained back their independence. However, the situation is more complicated for the two remaning studios, Ninja Theory and Arkane.

“Unfortunately, two separate agreements for Ninja Theory fell through. We will now begin consultation with employees on a proposed closure while continuing to explore other paths forward. Consultation with Arkane remains underway and is expected to continue through the end of the year,” Booty said today.

While these studio divestitures are still ongoing, Booty also announced a major reorganization of Xbox’s internal studios today. Rare (Sea of Thieves) and World’s Edge (Age of Empires) are now under the Activision umbrella, and the Call of Duty developer will also oversee the next mainline Halo game, which will be developed by a brand new team. Halo Studios (formerly 343 Industries) will continue to exist, but its main task will now be “supporting the Halo community and games in-market,” and I assume this mostly means Halo: Infinite and the freshly released Halo: Campaign Evolved.

Bethesda, one of the biggest acquisitions of the Phil Spencer era, will become the new home of Obsidian Entertainment, which started working on a new Fallout game in collaboration with Bethesda Game Studios. Obsidian will also “continue its current projects, including Grounded,” Booty said today.

As part of this major studio reorg, Microsoft is also merging Forza Motorsport developer Turn 10 with Playground Games, which recently released Forza Horizon 6 and is developing the much-anticipated Fable reboot. “These two studios have been creative and franchise partners for over a decade, and today’s changes will formally move their work into one team,” Booty said today.

Lastly, Booty announced that Candy Crush developer King will integrate the Microsoft Casual Games team, “uniting our two global leaders in casual game design and live operations.” Microsoft Casual Games is behind mobile games such as Microsoft Solitaire Collection, Minesweeper, Jewel 2, and more.

Microsoft isn’t done with the 3,200 job cuts it announced back in July, so we can probably expect more changes in the coming weeks and months. Booty said that today’s job cuts and studio reorg aim “to strengthen our franchises and games by operating fewer business units, aligning groups that already work closely together, and focusing our publishing expertise.” The exec added that the Xbox leadership team plans to share an update on its progress on its big Xbox reset during an October 6 town hall meeting