Microsoft cuts 268 Xbox jobs as it continues major restructuring
Microsoft announced the layoff of 268 employees across its Xbox division, reshuffling studios and shifting several first-party teams under Activision as part of a broader reorganization.
Microsoft said it is eliminating 268 positions within its Xbox gaming division as part of a restructuring plan that it describes as the most significant in the unit's history. The cuts affect a range of studios, including a reduced Halo Studios team that will continue to support existing titles such as Halo Infinite, while the development of the next Halo game has been halted.
Other first-party studios are being moved under Activision control, including Rare, the developers of Sea of Thieves, and World’s Edge, known for Age of Empires. Turn 10 Studios and Playground Games, responsible for the Forza franchise, are merging into a single studio, and Obsidian is being transferred to Bethesda Game Studios to work on a new Fallout entry.
Analysts note that the reductions also target core business and management functions, and some observers suggest the changes could position Xbox for a future spin-off or operation as a separate subsidiary. The restructuring aims to streamline development, reduce costs and accelerate the release of larger franchise titles.
The layoffs come amid ongoing adjustments to Xbox Game Pass, with Microsoft reportedly planning tiered subscription options that may limit day-one game access and introduce ad-supported plans. Industry sources indicate that the company is responding to mixed results from the service and declining hardware revenue, as recent console pre-order data showed stronger demand for competing platforms.
Microsoft indicated that the current round of cuts represents roughly three-quarters of the planned restructuring, with additional changes possible as the company continues to refine its Xbox strategy.