Microsoft is cutting 268 roles across Xbox as part of the gaming division's continuing reset, while also redrawing which studios and business groups are responsible for some of its biggest franchises. The company announced the changes internally on September 22 and published the memo through Xbox Wire.
The cuts affect Halo Studios, other first-party studios, and Xbox Game Studios management and central functions. Xbox chief content officer Matt Booty said the actions taken since July, including studio divestitures, put the company roughly three-quarters of the way through restructuring that had already been announced.
Halo moves under Activision's expanded remit
The most visible change is around Halo. Activision is expanding its remit to include World's Edge and Rare, and Microsoft says a new team inside Activision will lead development of the next major Halo game. A smaller Halo Studios team will remain focused on supporting Halo Infinite, Halo: Campaign Evolved and the existing player community.
That does not mean every Xbox team is simply being folded into Activision. The reorganisation is split across several groups. Obsidian is moving under Bethesda, with the current Grounded team staying together while another group works with Bethesda Game Studios on a new Fallout project. King is taking responsibility for Microsoft's casual-games group, including long-running titles such as Solitaire.
Playground Games and Turn 10 are also being brought together as one organisation. Microsoft says the combined group will continue work across Forza and Fable. The structure is intended to reduce the number of separate business units and align teams that already collaborate closely.
Some studios still face uncertain outcomes
The memo also updates the status of studios Microsoft has been trying to divest. Double Fine and Compulsion Games have already returned to their management teams. Microsoft says the transition of Undead Labs is progressing, with a new publisher expected to support State of Decay 3 and its planned Game Pass launch.
Ninja Theory is in a more difficult position. Microsoft says a sale process did not produce a buyer and a consultation on a proposed closure will begin. Arkane is also in consultation while Microsoft considers the future of the studio and its Blade project.
Independent reporting from PC Gamer matches the core details of Microsoft's announcement, including the 268 eliminated roles, the move of Halo responsibility toward Activision and Obsidian's new position under Bethesda.
The structure also changes how several familiar Xbox labels map to the teams doing the work. Rare and World's Edge are moving into Activision's orbit, but their existing games do not disappear as a result. Likewise, the small Halo Studios group remains responsible for current Halo products even as leadership of the next major entry moves elsewhere. Microsoft has not announced release dates or detailed product plans for those future projects in this memo, so the organisational chart should not be read as a launch roadmap.
The practical takeaway is that this is both a staffing reduction and a substantial organisational change. Xbox is concentrating more franchise responsibility inside Activision, Bethesda and King while combining some long-standing internal teams. The next major checkpoint will be Microsoft's planned team town hall in October, when employees are expected to hear more about how the reset progresses from here.
Reporting notes