Xbox Cuts 268 Jobs, Hands Halo To Activision, Merges Studios And May Close Ninja

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Xbox Cuts 268 Jobs, Hands Halo To Activision, Merges Studios And May Close Ninja Theory

Xbox is gearing up for more layoffs and restructuring, with the Halo franchise possibly moving to Activision-Blizzard. Speculation suggests major changes ahead for studios, including potential shutdowns and consolidations.

Baden Ronie September 22, 2026 2–4 minutes

UPDATE – September 22, 2026: Well, the reports were correct—and I’m going to take a moment to appreciate the fact that my prediction at the bottom of this article was almost bang on. Which also kinda sucks.

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Microsoft has now officially announced another 268 job losses across Halo Studios, other first-party developers and Xbox Game Studios’ management and central teams. These are part of the 3,200 positions Microsoft previously said would be affected throughout its 2027 financial year, with the company claiming that it is now roughly three-quarters of the way through the wider restructuring.

Business Insider reports that approximately 500 Microsoft employees are being cut in total today. Most are reportedly within Xbox, while a smaller number affect Microsoft’s cloud and AI divisions.

The biggest change is that “Activision will develop the next Halo game using a newly assembled team”, while Halo Studios will be reduced to a small group supporting the community and existing games. So yes, my guess that Halo Studios would be gutted and turned into a support studio was essentially correct. I’m taking the win, although I would obviously prefer not to be collecting it from hundreds of people losing their jobs.

Elsewhere, Rare and World’s Edge are being moved under Activision, while Obsidian will join Bethesda and collaborate with Bethesda Game Studios on a new Fallout project. Playground Games and the remains of Turn 10 will merge into one studio focused on Forza and Fable, while Undead Labs has officially become independent with an unnamed new publisher for State of Decay 3. The situation is considerably worse for Ninja Theory, as two attempted sales have collapsed and Microsoft is now consulting staff over potentially closing the studio. Arkane’s future also remains undecided, with its consultation process expected to continue until the end of 2026.

Original story: Buckle up, folks, because the insider chatter is that Xbox is preparing to announce the next wave of its planned layoffs, as well as make big changes to how its studios are being handled.

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As part of these moves, NateTheHate claims that the Halo franchise will be moved to ABK (Activision-Blizzard-King). Interestingly, in another comment he specifies that only the IP itself is being put under the purview of ABK, not Halo Studios. Is this is a sign that Halo Studios could be shuttered? It could also be a way to put the studio under new leadership.

The other chatter is that other studios and teams will be moved around and consolidated as part of a major restructuring effort.

The Information is reporting that the next round of layoffs is also going to occur/be announced today alongside studios being consolidated. These are part of the previously announced 3200 layoffs, so we were already aware of them, although that hardly makes it feel any better.

Jaso Schreier also said something similiar on the 8-4 podcast. At around 1:24.50 he states outright that “The Blizzard layoffs are coming and imminent.” He specifies this is not in any way a reaction to Blizzcon as everything shown there was already planned well ahead of the announced layoffs.

My personal opinion is that Halo Studios will be gutted but will survive, essentially being a Halo support studio whose job is to help other teams make the next generation of Halo. Whether that’s worse than being shuttered, I don’t know.

We will find out in the next few days if any of this is true.