Xbox is undergoing significant layoffs as it restructures, while Activision will now develop future Halo titles, marking a major shift in the franchise.
On September 22, 2026, it was announced that Xbox, a Microsoft-owned company, has laid off 268 workers as part of its ongoing reorganization, aimed at eliminating a total of 3,200 jobs. This information was disclosed by Xbox's Chief Content Officer, Matt Booty, through an internal memo obtained by The Hollywood Reporter.
The recent layoffs form part of a broader initiative that began in July, affecting multiple studios under the Xbox umbrella. Currently, Xbox is approximately three-quarters of the way through this workforce reduction process.
Many studios have been impacted by these layoffs. Notable changes include Undead Labs, creators of State of Decay 3, which will now operate independently; Bethesda, which is absorbing Obsidian; and the merger of Playground Games and Turn 10. Furthermore, Ninja Theory is slated for closure amid ongoing studio restructuring efforts.
This restructuring signals a pivotal moment for Xbox, aiming to streamline operations and strengthen its gaming franchises. Upcoming titles are anticipated to benefit from these adjustments as the company narrows its focus to fewer business units, fostering tighter collaboration among development teams.
In a significant development, Activision has been announced as the new developer responsible for creating the next Halo game, a full-feature mainline installment in the iconic franchise. This transition is noteworthy, as Halo was previously developed by Bungie and later by Halo Studios, formerly known as 343 Industries.
Rob Kostich, Activision's president, expressed enthusiasm about this new venture, emphasizing the company's commitment to honoring Halo's legacy while aiming to create the best installment in the series. The incorporation of Halo into Activision's portfolio indicates a substantial investment in the franchise's future, leveraging the studio’s extensive experience in the gaming industry.
The ongoing layoffs and restructuring at Xbox appear to be a response to the challenging market landscape, positioning the company to compete more effectively in the gaming industry. The arrival of Activision as the lead on Halo suggests strategic partnerships to enhance Xbox's game offerings. Activision has successfully developed popular franchises such as Call of Duty and Crash Bandicoot, establishing a track record that lends weight to their new role with Halo.
This shift could redefine how Halo games are developed, as Activision aims to appeal to a broader audience while staying true to the franchise's core identity.
With Xbox’s significant workforce reduction and the transition of Halo development to Activision, the landscape for Xbox gaming appears to be in flux. A town hall meeting scheduled for October 6 will provide an opportunity for Xbox leadership and team members to discuss these changes and set expectations for the future.
As this extensive reorganization unfolds, the gaming community remains eager to see how these changes will impact the development of beloved franchises such as Halo. Ongoing support for affected employees and the quality of upcoming games will be critical touchpoints as Xbox navigates through this transformative phase.
Stay tuned for further updates as more information becomes available regarding the restructuring efforts and Activision's plans for the Halo series.
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