2026 so far has been quite a whirlwind for XBOX—while Microsoft’s gaming division has mostly been able to dodge criticism from fans regarding game ownership, the platform has continued its efforts towards keeping operations and profitability on track following a massive management shakeup earlier this year. That said, a new company update from Executive VP Matt Booty hints at more incoming changes throughout the division.
That being said, this includes lay-offs across 268 roles across Halo Studios, first-party studios, and central management layers, which brings the company three-quarters of the way through its previously announced restructuring. This follows mass lay-offs a few months ago, which cut as much as 3,200 jobs from the division. Part of Booty’s statement reads:
…we are eliminating 268 roles across Halo Studios, other first-party studios, and the XGS management and central functions layer. The actions completed since July, inclusive of the studio divestitures, bring us roughly three-quarters of the way through previously announced restructuring. I am deeply grateful for what our colleagues have built, and I know how difficult today will be for those leaving and the teams around them.
Alongside the layoffs, XBOX is also reorganizing its studio structure into larger publishing umbrellas. Activision will now oversee World’s Edge, Rare, as well as a newly formed team at Halo Studios tasked with developing the next Halo title separately from Call of Duty. Meanwhile, Bethesda will now incorporate Obsidian, which will continue its current projects alongside a new collaborative Fallout game with Bethesda Game Studios.
Additionally, Candy Crush maker King will absorb Microsoft Casual Games to combine live-operations software, while Playground Games and Turn 10 will merge into a single unit to manage both the Forza and Fable franchises.
Booty also confirmed updates regarding XBOX’s studio divestitures, with Compulsion, Double Fine, and Undead Labs now transitioning back to independent management with their IP, back catalogs, and runway funding, with Undead Labs set to release State of Decay 3 day one on Game Pass under a new publisher. However, two separate agreements to divest Ninja Theory have fallen through, with an unfortunate proposed studio closure now in the works. Consultations for Arkane are also ongoing and expected to continue through the end of the year.
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Finally, Booty stated that XBOX higher-ups will address these developments and outline the future game lineup during a town hall scheduled for October 6.