Xbox lay off 268 people as Activision take over Halo and Rare, while Obsidian become part of Bethesda, plus Forza and Fable studios merge
Xbox has laid off 268 employees and reorganized its studios, transferring franchises like Halo to Activision and merging others under Bethesda and new combined teams.
Xbox confirmed the elimination of 268 roles across its studios and management, marking the second round of layoffs this year following July’s cuts. The company stated the restructuring aims to consolidate franchises and align closely working groups to strengthen its portfolio. Microsoft’s Xbox chief content officer Matt Booty outlined the changes in an internal memo, emphasizing a focus on fewer business units and streamlined publishing expertise.
Activision will take over development of the next Halo game, with a dedicated team separate from Call of Duty’s ongoing work. Rare, known for Sea of Thieves, and World’s Edge, creators of Age of Empires, will also move to Activision. Halo Studios will remain to support existing Halo titles and community engagement, according to Xbox’s announcement.
Obsidian Entertainment, developers of The Outer Worlds and Avowed, have been integrated into Bethesda. Playground Games and Turn 10 Studios, responsible for Forza and Fable respectively, have been merged into a single studio to develop new entries in both series. Microsoft Casual Games, behind solitaire and sudoku apps, has been absorbed by mobile studio King.
The fate of other studios remains uncertain, with Ninja Theory likely closing after failed acquisition attempts, while Undead Labs, Compulsion Games, and Double Fine have become independent studios. Arkane’s future is still under consultation, expected to conclude by the end of the year. The union representing affected workers criticized the layoffs as prioritizing profits over staff.