Xbox's September reset cuts 268 roles and gives Activision the next Halo

Xbox said on September 22, 2026, that it is eliminating 268 roles and moving development of the next Halo game to a newly formed Activision team. The same employee memo places several other studios under larger publishing groups and starts consultation on a proposed, not completed, closure of Ninja Theory. For players, the immediate change is who is responsible for future games; Microsoft has not used this announcement to provide new release dates or demonstrate what the new teams will produce. For affected staff, the job cuts and unresolved studio futures are already consequential.

A July plan enters another stage

This is part of the Xbox reset announced July 6, when Xbox chief Asha said the division would reduce its workforce by about 3,200 roles during fiscal 2027 and move four studios toward new management. The September 268 roles are part of that previously announced restructuring, not a second 3,200-role plan. Matt Booty, Xbox's content chief, says the completed actions, including divestitures, bring the process roughly three-quarters of the way through. That fraction is Microsoft's progress description; it does not specify how many further jobs or studios will be affected.

The new cuts span Halo Studios, other first-party studios, and management and central functions at Xbox Game Studios. GeekWire independently reported the 268-role Xbox figure and noted that Microsoft's broader job reductions that day extended beyond gaming. The company has not published a studio-by-studio count for these 268 positions. It would be misleading to assign a particular number of losses to Halo or another team.

Franchise responsibility is being redrawn

The clearest handoff is Halo. Xbox says Activision will build the next title with a purpose-built team separate from its Call of Duty work. A smaller Halo Studios team will support the existing Halo community and games. That division of work answers who has the announced next project, but says little yet about its creative direction or release schedule.

The rest of the September memo describes several distinct moves:

• Activision also takes responsibility for World’s Edge and Rare. Microsoft does not say their existing games are moving to Call of Duty teams.

• Bethesda adds Obsidian. Xbox says Obsidian continues its current projects, including Grounded and a new Fallout project made with Bethesda Game Studios.

• King takes in Microsoft Casual Games. Playground and Turn 10 become one studio focused on Forza and Fable.

These are reporting and production changes, not a published assessment of game quality. The practical question for players is whether the new groups can keep teams and projects coherent through the transition. The memo offers the intended organizational chart, not evidence that development will accelerate.

Divestiture and closure are different outcomes

Xbox says Compulsion and Double Fine returned to their management in August with their intellectual property, back catalogs and funding for the transition. Undead Labs has since moved on similar terms. Its State of Decay 3 is still planned for day-one Game Pass release with a new publisher, according to the memo. That is a specific distribution commitment, not a new launch date.

Ninja Theory is in a different position. Xbox says two separate divestiture agreements failed and that it will consult employees on a proposed closure while exploring other paths. It has not announced a completed shutdown. Consultation at Arkane also continues, with Xbox expecting it to run through the end of the year. These distinctions matter for both employees and fans: a proposed closure and an unresolved consultation should not be reported as finished studio exits.

The next meaningful evidence will be decisions from those consultations and concrete updates from the teams responsible for Halo and the other affected games. Microsoft has scheduled an October 6 staff town hall, but the memo does not promise a public roadmap there. Until project details arrive, the reset shows a change in ownership and staffing, not an outcome for the games themselves.

Sources

• Xbox Wire: Continuing Our Reset, September 22

• Xbox Wire: Resetting Xbox, July 6

• GeekWire: Microsoft cuts hundreds more jobs and shifts Halo to Activision

• The Verge: The Xbox reset gets ugly