Xbox Cuts 268 Jobs, Moves Halo to Activision in Studio Overhaul

Xbox eliminated 268 roles on Sept. 22, 2026, and transferred development of the next Halo title to Activision, publisher of Call of Duty, as part of a broad reorganization of Microsoft's game studios. The cuts affect Halo Studios, other first-party teams and central Game Studios functions. Chief Content Officer Matt Booty said the reductions bring the division roughly three-quarters through a restructuring announced earlier this year. Activision will form an independent team for Halo while Halo Studios retains a small group supporting existing games. Activision also assumes oversight of Rare and World's Edge. The layoffs follow Xbox CEO Asha Sharma's plan to cut up to 3,200 positions, about 20% of staff, by fiscal 2027, citing a 5% year-over-year revenue decline and Game Pass subscribers below internal targets. Compulsion Games and Double Fine completed spinouts in August; Undead Labs finalized its exit. Ninja Theory faces possible shutdown after two buyer deals collapsed, and Arkane talks continue through year-end. An all-Xbox town hall is set for Oct. 6.