Xbox cuts 268 more jobs and hands the next Halo game to Activision

Xbox cut 268 more jobs and confirmed the next Halo game will be made by Activision, while what's left of Halo Studios turns into a support-only team.

Xbox rolled out another wave of layoffs this Tuesday, cutting 268 jobs across Halo Studios, other first-party teams, and the Xbox Game Studios central management layer. The cuts were confirmed in an internal memo from content chief Matt Booty, and they're a reminder that Microsoft's so-called "reset" of the division is nowhere near finished.

The headline detail isn't the number itself. Booty confirmed the next Halo game will be developed by Activision, the studio behind Call of Duty, through a brand new team built specifically for the job and kept separate from the people working on the shooter. What's left of Halo Studios (formerly 343 Industries) becomes a small support crew, keeping the existing games running and looking after the community.

It doesn't stop there. World's Edge, the team behind Age of Empires, and Rare are also moving under Activision's oversight as part of the new structure. In practice, Xbox keeps funneling decision-making power toward the division Activision Blizzard brought in back in 2023, and that says a lot about who actually calls the shots these days.

This round didn't happen in a vacuum. Earlier this year Microsoft had already cut around 1,600 jobs inside Xbox and warned another step was coming. According to Booty, the moves taken since July put the company roughly three-quarters of the way through the restructuring it announced, which means there's still more to come before the books close.

For players, the immediate impact is small since there wasn't a new Halo on the calendar anyway. But the symbolism lands hard. For years the franchise was treated as untouchable inside Xbox, the flagship that defined the brand alongside the console itself. Handing it to the Call of Duty crew is an admission, without saying it outright, that the previous team wasn't delivering what Microsoft wanted, not on pace and not on quality.

The community reaction wasn't a celebration either. Some see it as a shot at reviving the franchise with people who genuinely know large-scale first-person shooters, but a lot of folks just read it as one more sad chapter for a division that keeps trading people for reorgs at an uncomfortable pace. Whether this "Halo by Activision" actually turns into something with its own identity, or just becomes another project lost in the shuffle, is anyone's guess.