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Xbox Cuts 268 More Roles and Hands the Next Halo to Activision

Matt Booty's 'Continuing Our Reset' post reorganizes Xbox's studios, spins off Double Fine and Compulsion and opens closure talks for two teams.

September 22, 2026·Source: Game Informer

Microsoft is eliminating another 268 roles across Xbox and moving development of the next Halo game to Activision, the studio behind Call of Duty. The news came September 22 in an Xbox Wire post titled “Continuing Our Reset” from Matt Booty, Xbox EVP and Chief Content Officer, as reported by Game Informer.

The layoffs. The 268 roles span first-party studios, Xbox Game Studios management and central functions. Reports say Booty described the company as roughly three-quarters of the way through its previously announced restructuring.

Halo. Activision takes over development of the next Halo title. A reduced team at Halo Studios will continue supporting existing Halo games and community engagement.

The reorganization. According to Game Informer:

  • Activision expands its oversight to include World’s Edge and Rare.
  • Bethesda absorbs Obsidian, which continues work on Grounded and a collaborative Fallout project.
  • King incorporates Microsoft Casual Games.
  • Playground and Turn 10 merge into a unified Forza and Fable studio.

Spin-offs and closures. Compulsion and Double Fine are now independent. Undead Labs retains State of Decay 3 for Game Pass in 2027. Booty said two separate agreements fell through for Ninja Theory, and closure consultations are beginning there. Arkane is in a similar situation, with consultations extending through the end of the year.

Reaction. Undead Labs said in response to the wider trend that “there have been far too many announcements like this across the industry.” Separately, a report we reviewed said a former Halo Studios cinematic director said he was “promoted and laid off in the same week.”

Why it matters. This is a major consolidation of one of gaming’s largest platform holders: fewer business units, a flagship franchise moving to a different publisher inside the same company, and two studios’ futures unresolved. We do not have confirmation of what the Halo handover means for the game’s design or timeline, and we won’t speculate.

We will update this story as Microsoft or affected studios share more details.