Microsoft has laid off 268 employees across Halo Studios, other first-party studios, and central management as part of its ongoing restructuring. The company aims to reduce its workforce by 3,200 over the fiscal year, with these layoffs bringing it roughly three-quarters of the way toward that goal. Halo Studios, previously known as 343 Industries, will now focus on supporting existing Halo games rather than developing new titles.
Activision has been assigned responsibility for the next Halo game, with a new, dedicated team separate from Call of Duty development. This follows the transfer of Rare and Age of Empires studio World's Edge to Activision's oversight. Halo Studios will retain a small team to support the franchise, but the next mainline Halo installment will be developed externally for the first time since 2007.
Other studio reorganizations include merging Playground Games and Turn 10 into a single entity for Forza and Fable development, folding Obsidian into Bethesda, and uniting King with Microsoft Casual Games. Ninja Theory faces potential closure after failed divestiture attempts, while Arkane remains in consultation. These changes aim to streamline operations and focus on key franchises, according to Xbox leadership.