Microsoft Cuts 268 Jobs and Shifts Studios in Ongoing Xbox Restructuring

Microsoft has announced a fresh round of job cuts affecting 268 employees, alongside sweeping structural changes and studio reorganisation across its gaming division, according to a report by Eurogamer.

The latest reductions follow a massive downsizing effort in July, when Xbox CEO Asha Sharma revealed plans to eliminate 3,200 positions. Half of those cuts occurred immediately, while studios like Compulsion Games and Double Fine regained independence.

This new wave of layoffs targets personnel at Halo Studios, central management layers, and other first-party teams. Eurogamer notes that the current measures push Microsoft roughly three-quarters through its previously outlined restructuring plan.

Studio Reorganisation and Obsidian Move

In a communication sent to staff via the internal Xbox blog, executive vice president and chief content officer Matt Booty detailed several operational shifts. Rare and World's Edge are moving under Activision's oversight, while Playground Games and Turn 10 are merging to handle the Forza and Fable franchises.

Obsidian is shifting to report to Bethesda. The studio will maintain work on existing titles like Grounded and collaborate with Bethesda Game Studios on an upcoming Fallout game.

Meanwhile, the next installment in the Halo series will be built by Activision using a dedicated team separate from Call of Duty operations. A small group will remain at Halo Studios to maintain active titles and assist the player community.

Uncertainty for Ninja Theory and Arkane

The updates also brought negative news regarding two developers whose futures were uncertain. Ninja Theory faces a proposed shutdown after two potential acquisition deals failed, prompting Microsoft to open employee consultations.

Consultation processes for Dishonored developer Arkane are still ongoing and will likely persist through the conclusion of the year. Booty stated that the changes aim to consolidate business units, support major franchises, and streamline publishing operations.