Microsoft eliminated 268 positions across Halo Studios, other first-party developers, and central management on September 22, 2026, while shifting development of the next main Halo game to Activision. Xbox Executive Vice President and Chief Content Officer Matt Booty announced the cuts in an internal memo published on Xbox Wire, marking a major structural consolidation following Microsoft’s $68.7 billion acquisition of Activision Blizzard in 2023.
The Xbox Reset and Halo Studios Restructuring
The September 22 layoffs form part of an ongoing restructuring initiative dubbed the "Xbox Reset." According to Matt Booty’s internal memo, the cuts target three distinct areas: Halo Studios directly, several internal teams under the Xbox Game Studios umbrella, and central leadership functions overseeing the broader portfolio.
Halo Studios, formerly known as 343 Industries, will not close entirely. A small team remains on-site to handle live-service operations and community support for existing titles in the franchise. However, the studio that managed the series for nearly two decades has relinquished primary development duties for future franchise installments.
Activision Takes Over Next Halo Development
Activision will now develop the next principal Halo title. According to Matt Booty’s memo, the publisher is establishing a dedicated unit specifically for the project, operating separately from ongoing Call of Duty pipelines.
Activision CEO Rob Kostich outlined the publisher’s approach in an interview with GameFile. "When it comes to Halo, our goal is truly clear: to build the best Halo game ever, worthy of its universe and legacy, while staying true to what made players love it from the beginning," Kostich told GameFile. He added that the publisher has started assembling a specialized team to deliver the next chapter alongside the community.
As of the announcement, neither Xbox nor Activision has released a codename, team roster, launch window, or gameplay details for the project.
Layoffs Hit Leadership and Veteran Staff
The September restructuring impacted upper management and veteran developers alike. Halo Studios veteran Josh Daniels experienced the cuts firsthand, receiving a promotion to film director and a layoff notice during the same week.
Daniels shared his experience on professional networking platform LinkedIn, writing: "Getting promoted and laid off in the same week is pretty wild. I’m one of the many affected by the layoffs at Halo Studios." He added that he was searching for new roles in film direction or production.
Other internal studios also felt the impact of the September 22 directive. Developer Rare, known for Sea of Thieves, and World’s Edge, the team behind Age of Empires, both saw their operational alignment shift as Activision assumed a heavier leadership role across Microsoft’s broader gaming division.
Frequently Asked Questions
How many jobs did Xbox cut in September 2026?
Microsoft eliminated 268 roles across Halo Studios, Xbox Game Studios, and central management on September 22, 2026.
Who is developing the next Halo game?
Activision is taking over development of the next primary Halo title, led by a newly formed, dedicated team separate from the Call of Duty franchise.
Is Halo Studios shutting down?
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