Xbox Announces Fresh Layoffs, Shakes Up Halo, Bethesda & Forza Studios in Major Restructuring

As expected, Xbox has announced that it is laying off 268 employees while reorganizing several of its first-party studios. In a message sent to Xbox employees on September 22, EVP and CCO, Matt Booty, said the layoffs affect Halo Studios, other first-party studios, and the Xbox Game Studios management and central functions layer. He said the changes completed since July, including studio divestitures, have taken Microsoft roughly three-quarters of the way through its previously announced restructuring.

Xbox is reshuffling some of its biggest studios

The restructuring will also change which groups oversee several major franchises. Activision will expand its remit to include World’s Edge and Rare, while also taking responsibility for the next Halo game. Xbox says the next Halo title will be developed by a new purpose-built team separate from ongoing Call of Duty development. A smaller team at Halo Studios will continue supporting existing Halo games and the community.

Bethesda is also expanding its remit to include Obsidian, which will continue working on its current projects, including Grounded and the new Fallout project being developed alongside Bethesda Game Studios.

Meanwhile, King will take responsibility for Microsoft Casual Games, bringing the two groups together under one organization. One of the biggest internal changes involves Playground Games and Turn 10, which will become a single studio focused on the Forza and Fable franchises. Microsoft says the two teams have worked together as creative and franchise partners for more than a decade.

Ninja Theory now faces a proposed closure

Microsoft also provided an update on its studio divestitures. Compulsion, Double Fine and Undead Labs have returned to independent management arrangements, with Undead Labs set to release State of Decay 3 day one on Game Pass under a new publisher.

The situation is considerably different for Ninja Theory. Microsoft said two separate agreements for the studio fell through and it will now begin consulting employees on a proposed closure, while still exploring other options. Consultation with Arkane is also continuing and is expected to run through the end of the year.

Booty said the focus now is on supporting affected employees, with Xbox planning an all-company town hall on October 6 to discuss the restructuring and its upcoming game lineup.