Xbox lays off 268 employees amid major studio reorganization
Xbox has announced a major restructuring involving the layoff of 268 employees across Halo Studios, various first-party developers, and Xbox Game Studios management. The reshuffle includes the transfer of several major franchises to other divisions.
A significant part of the reorganization involves moving World’s Edge and Rare to Activision. Under this new structure, a purpose-built team at Activision will focus on developing the next Halo title, while a smaller team at Halo Studios will remain to support the existing Halo community and current games. Additionally, Obsidian Entertainment will move to Bethesda Softworks, and Microsoft Casual Games will transition to King.
In a move to consolidate racing and RPG expertise, Playground Games and Turn 10 Studios are merging into a single studio dedicated to the Forza and Fable franchises.
The company also provided updates on previous divestitures. Compulsion Games, Double Fine Productions, and Undead Labs have successfully transitioned to independent management. Undead Labs will release State of Decay 3 on day one on Game Pass under a new publisher. Meanwhile, negotiations to sell Ninja Theory have fallen through, leading to discussions regarding a potential closure of the studio. Consultations with Arkane Lyon are expected to continue through the end of 2026.
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