Xbox's organizational reset continued today with another round of layoffs and a major restructuring of Xbox Game Studios.
In a blog post titled "Continuing Our Resert," Xbox Executive Vice President and Chief Content Officer Matt Booty confirmed another round of layoffs, which includes 268 roles across Halo Studios, other first-party studios, and the XGS management and central functions layer.
Xbox had previously announced plans to eliminate 3,200 roles, roughly 20% of its workforce, over the course of its fiscal year. While about 1,600 employees were cut back in July, the remaining reductions have been happening over the last couple of months. With this latest round of layoffs, Booty confirmed Xbox is now "three-quarters of the way through previously announced restructuring."
Xbox's game studios are also underoing a massive reorganization.
Among the most notable changes, Activision is taking over development on the next Halo title. A new "purpose-built team" has been created, separate from the 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.
Activision will also now oversee World's Edge, Microsoft's studio created in 2019 specifically to oversee and manage the Age of Empires franchise, as well as Rare, one of Xbox's oldest and best-known first-party studios responsible for Sea of Thieves (but best known for games like Banjo-Kazooie, Perfect Dark, and GoldenEye 007.
Obsidian is being moved under Bethesda's organizational umbrella, but will still continue to operate as its own studio. All this means is Bethesda's leadership will have broader oversight over Obsidian, similar to a parent publishing group managing another studio. Obsidian will continue its current projects, including Grounded, and the new Fallout project being made in collaboration with Bethesda Game Studios.
Playground Games and Turn 10 are being merged into a single studio. Instead of operating as two separate Xbox teams, they’ll now function as one organization focused on Forza and Fable.
Compulsion (Contrast, South of Midnight), Double Fine (Psychonauts, Broken Age), and now Undead Labs (State of Decay) have been spun out of Xbox, with their IP, back catalogs, and funding. Undead Labs has also secured a new publisher, and State of Decay 3 will still launch day one on Game Pass.
Ninja Theory is, unfortunately, in a much worse position. Two divestiture deals fell through, so Microsoft is now consulting employees on a proposed studio closure, while still looking for alternatives.
Arkane’s future is also unresolved, with consultation continuing through the end of the year.
"I am deeply grateful for what our colleagues have built, and I know how difficult today will be for those leaving and the teams around them," Booty said. We should get another update on the state of Xbox on October 6 durign the company's town hall.