Microsoft Axes 268 Xbox Staff Amid Wider Gaming Division Reorganization

Microsoft has announced major restructuring in its gaming division, affecting over 3,200 roles. The company has laid off 268 employees, bringing it roughly three-quarters of the way through the planned 3,200 role reductions.

The layoffs include staff from first-party development teams, Halo Studios, and Xbox Game Studios management. In a significant change, Activision will take over the development of the next mainline Halo title's, transferring it from Halo Studios (formerly 343 Industries).

Several studio mergers were announced alongside the layoffs: Forza and Fable studios merge into one studio covering both franchises; Obsidian joins Bethesda, overseeing existing projects; King absorbs Microsoft Casual Games, including Microsoft Solitaire. Meanwhile, Ninja Theory faces possible closure after two separate deals to hand off the Hellblade developer fell through.

Microsoft has stated that the wider round of cuts announced this week totals fewer than 600 jobs globally, including around 300 in Washington state. The company says it aims to complete the studio reset by year's end, with some studios expected to close and others absorbed into other companies.