# Microsoft reshapes Xbox studios in latest consolidation and job cuts

- URL: https://talkfuse.com/story/shuffling-the-deck-chairs-xbox-continues-its-reset-with-dramatic-restructuring/
- Published: 2026-09-22T18:18:38+00:00
- Updated: 2026-09-23T01:26:44+00:00
- Original publisher: Ars Technica
- Original article: https://arstechnica.com/gaming/2026/09/shuffling-the-deck-chairs-xbox-continues-its-reset-with-dramatic-restructuring/
- Topics: Art, Culture, Entertainment, Gaming

## Key points

- Halo franchise transferred to Activision with studio reduced to support team
- 268 new layoffs alongside major studio consolidations and reorganisations
- Restructuring aims to cut management layers and streamline decision-making

## Summary

Microsoft has announced a major restructuring of its Xbox gaming studios aimed at reducing bureaucratic layers and consolidating independent operating teams. The restructuring, which includes 268 additional job cuts, represents a significant consolidation of the company's gaming division as part of a broader "reset" announced in July. The primary driver is to streamline decision-making and strengthen franchise development by eliminating fragmented operations that previously hampered coordinated work across studios.

The most significant change involves transferring the Halo franchise to Activision's control, with Halo Studios reduced to a small community-support team. Other major reorganisations include Obsidian Studios joining Bethesda, Activision also taking control of Rare and World's Edge, and Playground Games merging with Turn 10. Microsoft is actively seeking buyers for Ninja Theory and Arkane Studios whilst pursuing separate divestments. These moves form part of Microsoft's broader restructuring effort, with the company approximately three-quarters through its announced plan of 3,200 layoffs, driven by the need to reduce excessive management hierarchy that previously involved work passing through as many as 14 levels.

## Coverage

- [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/)
- [GamesRadar+: After Microsoft's latest bloodbath, former Blizzard president Mike Ybarra offers "props to Xbox"](https://www.gamesradar.com/games/halo/after-microsofts-latest-bloodbath-former-blizzard-president-mike-ybarra-offers-props-to-xbox-for-dismantling-halo-studios-the-best-decision-to-reset-halo/)

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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.