# Microsoft Overhauls Xbox Gaming Division Amid 3,200+ Layoffs and Studio Reorganisation

- URL: https://talkfuse.com/story/microsoft-overhauls-xbox-gaming-division-amid-3200-layoffs-and-studio-reorganisation/
- Published: 2026-09-22T17:11:12+00:00
- Updated: 2026-09-23T00:02:11+00:00
- Topics: Americas, Art, Business, Companies, Culture, Economy, Entertainment, Gaming, Software, Technology

## Key points

- Xbox is cutting more than 3,200 jobs amid a major restructuring.
- Halo development is moving to a new Activision-led team.
- Multiple studios are being consolidated, merged or spun off.

## Summary

Microsoft is reorganising its Xbox gaming division alongside a planned reduction of more than 3,200 jobs, consolidating studios and shifting major franchises between subsidiaries. Halo development is moving to a new Activision-led team, while Halo Studios will remain primarily a support studio; the changes further reshape Xbox’s identity and strategy.

The latest phase includes 268 job eliminations across Halo Studios, other first-party studios and central management functions, following 1,600 layoffs in July and a further 1,600 planned. Rare and World’s Edge are moving under Activision, Obsidian under Bethesda to refocus on Fallout, casual games under King, and Playground and Turn 10 are merging; Double Fine and Compulsion have also become independent. Microsoft says the reset aims to reach more than one billion daily users by concentrating on franchises such as Minecraft, Halo and Candy Crush while reassessing Game Pass investment.

## Coverage

- [Polygon: Undead Labs becomes employee-owned while State of Decay 3 remains on track](https://www.polygon.com/undead-labs-state-of-decay-3-microsoft-layoffs-closures/)
- [Polygon: Every Xbox Studio’s Current Status After Multiple Rounds of Layoffs](https://www.polygon.com/xbox-studio-status-september-2026/)
- [Ars Technica: Microsoft reshapes Xbox studios in latest consolidation and job cuts](https://arstechnica.com/gaming/2026/09/shuffling-the-deck-chairs-xbox-continues-its-reset-with-dramatic-restructuring/)
- [The Verge: Microsoft reshapes Xbox through sweeping cuts and studio reorganisation](https://www.theverge.com/games/998758/xbox-activision-blizzard)

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Summarised by TalkFuse (https://talkfuse.com/). Quote the original publisher for the reporting and link this page for the summary and discussion.