"Good luck today, Halo friends": After years of rivalry, Call of Duty's creators have taken charge of Xbox's defining FPS series amid yet more layoffs
Microsoft has transferred development of the next Halo game to Call of Duty’s publisher Activision amid 268 layoffs, including at Halo Studios, as part of a broader restructuring of Xbox’s first-party teams.
Microsoft has transferred development of the next Halo game to Activision, the publisher behind Call of Duty, marking a significant shift in the franchise’s leadership. The move is part of a broader restructuring of Xbox’s first-party studios, which includes layoffs of 268 employees across Halo Studios, other first-party teams, and management layers. The affected staff remain unidentified, and the practical impact on ongoing Halo projects is not yet clear. Xbox chief creative officer Matt Booty framed the changes as part of a strategic "reset" to streamline operations.
Halo Studios, formerly known as 343 Industries, has been demoted to a support role for existing Halo games following the layoffs. The studio, founded in 2007, had previously developed major entries like Halo 4, Halo 5: Guardians, and Halo Infinite, as well as remasters such as Halo: The Master Chief Collection. The studio’s recent Halo: Campaign Evolved has not yet shown strong commercial performance, though Microsoft has not released detailed sales figures. The shift to Unreal Engine 5 for future projects underscores the broader technical changes underway.
The announcement follows Microsoft’s July 2024 plan to eliminate 1,600 jobs, part of a total workforce reduction of 3,200 across its next financial year. The latest layoffs are accompanied by studio mergers and project reallocations, with Activision now leading the next Halo title under a separate team. Microsoft has emphasized that Halo’s development will remain distinct from Call of Duty’s, though the move has sparked concerns among fans about the franchise’s creative direction.
The restructuring has drawn public support from former Halo Studios employees, including art director Glenn Israel and senior software engineer Bill Rosas, who offered solidarity to affected colleagues. Israel, who left in October 2025, has previously criticized senior Halo representatives for alleged mistreatment during restructuring. The layoffs are part of Microsoft’s broader effort to "reset" its gaming business, though critics question the long-term strategic benefits of the approach.