Microsoft cut fewer than 600 jobs worldwide on Tuesday, and 268 of them were roles in Xbox Game Studios. That covers Halo Studios, other first-party studios and the division's management and operating teams. About 300 of the total fall in Washington state, across several divisions rather than gaming alone.
These are not extra cuts on top of July's. Microsoft said then that Xbox would shed about 3,200 roles by the end of its financial year, roughly a fifth of the division, in what Xbox chief executive Asha Sharma called its biggest restructuring ever. Sharma said the business was not healthy and was running at margins three to ten times lower than comparable platform and publishing businesses. Tuesday's cuts sit inside that number, and the company says the restructuring is now about 75% complete.
Halo is moving to the Call of Duty company
The bigger change is who publishes what. Matt Booty, Xbox's chief content officer, told staff the goal is fewer business units, groups that already work together aligned, and publishing expertise concentrated. Work on the next Halo game moves to Activision, which Microsoft bought in 2023 for $68.7 billion, and a new team kept separate from Call of Duty will run it. A reduced team stays at Halo Studios, formerly 343 Industries, to support the existing games and esports. Activision's president, Rob Kostich, says a purpose-built team is already being assembled.
Activision is collecting studios. It also takes over World's Edge, behind Age of Empires, and Rare, the English studio behind Sea of Thieves. Obsidian Entertainment joins Bethesda, taking its Grounded franchise with it. Microsoft Casual Games, which makes Solitaire and the other Windows-bundled titles, moves under King, the maker of Candy Crush. Turn 10 and Playground Games, a decade into making Forza together, merge into one studio that will also make Fable.
Three studios are not settled. Undead Labs, behind State of Decay, has been spun off, with State of Decay 3 still due on Game Pass on day one under a new publisher. Ninja Theory, which makes Hellblade, may close after two hand-off deals fell through, though Microsoft still hopes to place it elsewhere. Arkane in France, the last of five studios put up for divestment in July, has no outcome yet.
The cuts that are not about games
Not all of Tuesday's cuts were about games. Microsoft also cut roles in cloud, AI, marketing and research, which it calls normal course of business, with no single cause behind them. It is the same pattern all year: 4,800 jobs went globally in July, about 2% of the workforce, after more than 15,000 in 2025.
The company is still hiring at the other end. It says 850 university recruits started in August, and about a third of the roughly 8,750 US employees eligible for its first voluntary retirement offer took it. For South African players this is not a jobs story; none of the roles are here. It is a change in who publishes the games they already play, and the next Halo will come from the studio that makes Call of Duty.
