Xbox Announces Halo Layoffs and More Changes in Big 'Reset'

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Published Sep 22, 2026, 10:18 AM EDT

Michael McWhertor is a New York-based journalist and editor with more than 20 years of experience covering games, industry events, technology, movies, and TV.

Microsoft reveals hundreds of layoffs and studio reorganizations

Master Chief holds an assault rifle in Halo 3

Microsoft's sweeping layoffs in its Xbox division are continuing, with chief content officer at Xbox Matt Booty confirming Tuesday that 268 employees are being laid off across Halo Studios, other first-party studios, and the Xbox Games Studios management team. In a memo to Xbox staff published Tuesday, Booty outlines the latest major changes to Microsoft's gaming division, which will now see the Halo franchise going to Activision.

Booty also confirms that Microsoft plans to close Hellblade developer Ninja Theory. It's unclear at this stage what that means for the recently announced Senua, the follow-up to Senua's Saga: Hellblade 2.

Activision will now oversee Rare and Age of Empires studio World’s Edge. Activision will also be developing the next Halo title, Booty said, "led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty. A small team at Halo Studios will continue supporting the Halo community and games in-market."

Booty said that plans to find a buyer for Ninja Theory fell through, and Microsoft "will now begin consultation with employees on a proposed closure while continuing to explore other paths forward." Consultation with Dishonored and Blade developer Arkane "remains underway and is expected to continue through the end of the year," Booty said.

Halo Studios is the latest team hit by mass Xbox layoffs

Microsoft's latest round of layoffs follows previous cuts announced in July, when Xbox CEO Asha Sharma cut 1,600 jobs and announced that it would reduce its workforce by a total of 3,200 staff over the next year. Those cuts included entire studios, including Double Fine Productions and Compulsion Games, which were released from Xbox Game Studios and reverted to independent studios; and Undead Labs and Ninja Theory, which have been sold to unnamed third parties.

Those layoffs included employees across other divisions, including Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and Xbox Game Studios.

"We now find ourselves competing not only with the largest publishers, but also with smaller independent studios. It is neither possible nor desirable to own every great independent studio," Sharma said in a memo at the time. Sharma also promised to slash layers of management at Xbox to streamline work across teams.

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