Xbox Restructuring and Halo Shift
Microsoft eliminates hundreds of Xbox jobs and moves future Halo development to Activision.
Anonymous
Key Points
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The broader Microsoft cuts total fewer than 600 positions worldwide, including about 300 in Washington state, and extend beyond Xbox to cloud, artificial intelligence, marketing and research teams.
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The reorganization is being led by Xbox CEO Asha Sharma and chief content officer Matt Booty as part of an effort to cut costs and consolidate studios under fewer publishers to restore growth and profitability.
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A reduced Halo Studios team will remain in Redmond to support existing games, the Halo community and esports; Halo Studios was formerly known as 343 Industries.
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Activision President Rob Kostich said the company has already begun assembling a new team whose capabilities and talent will be distinct, with the aim of making “the greatest Halo game ever, worthy of its universe and legacy.”
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Microsoft’s earlier Xbox restructuring was announced as a plan to eliminate about 3,200 positions by the end of its fiscal year—roughly 20% of the division—and was described as the largest restructuring in Xbox history.
Microsoft is cutting 268 jobs across Halo Studios and other Xbox teams as part of a massive gaming restructure announced Tuesday. The company is also handing the next mainline Halo game to Activision, ending Halo Studios' 20-year role as the franchise's primary developer. Xbox Wire reported that the changes are roughly 75% complete, with the goal of simplifying operations and focusing on major franchises.
The 268 cuts are part of a broader Microsoft reduction of fewer than 600 jobs announced the same day, affecting cloud, artificial intelligence, marketing, and research teams worldwide. This follows roughly 3,200 Xbox-related job cuts disclosed earlier in the year, making it the largest restructuring in Xbox history. Washington Post reported that the reorganization consolidates studios under fewer publishers to cut costs and restore profitability.
Activision Takes Over Halo Development
Activision, the Call of Duty publisher, will build a brand-new team dedicated solely to the next mainline Halo game. This team will operate separately from the Call of Duty division. Gaming Bolt reported that Activision President Rob Kostich said the company has already begun assembling the team, which will have distinct capabilities and talent aimed at making the greatest Halo game ever.
A smaller Halo Studios team will remain in Redmond, Washington to support existing Halo games, the community, and esports. Halo Studios was formerly called 343 Industries and has developed every mainline Halo title since 2011. The shift marks a dramatic change for a studio that has been central to the franchise for over two decades.
Major Studio Shuffles Across Microsoft Gaming
Microsoft is reshuffling its entire gaming portfolio under different publishers. Activision now oversees Halo, plus Rare (Sea of Thieves) and World's Edge (Age of Empires). Bethesda takes on Obsidian Entertainment. King absorbs Microsoft Casual Games. TweakTown reported that Playground Games and Turn 10 are merging to focus exclusively on Fable and Forza.
The reorganization eliminates middle-management layers and groups studios that already work closely together. Xbox Chief Content Officer Matt Booty said the goal is to strengthen franchises by operating fewer business units and focusing publishing expertise where it matters most.
A Restructure Born From Microsoft's Mega-Acquisitions
Microsoft's gaming division became bloated after its $68.7 billion acquisition of Activision Blizzard in October 2023 and its earlier purchase of ZeniMax Media. The company created redundant leadership layers that slowed decision-making and blurred who was accountable for what. CEO Asha Sharma began dismantling this complexity in July 2026 with cuts affecting 1,600 workers.
Halo Studios itself had struggled with public perception and output on recent games. Many in the gaming community view the franchise's move away from 343 Industries with cautious optimism, hoping Activision's resources unlock better results. However, PC Gamer noted skepticism about whether adding more management layers actually simplifies operations, as Xbox originally promised.
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