Xbox has initiated a second wave of significant layoffs and internal restructuring this year, resulting in the dismissal of 268 employees. This follows an earlier round of cuts in July that impacted 1600 staff and led to the divestiture of several studios.
In a message to staff, Xbox's chief content officer Matt Booty stated that the recent actions, combined with earlier studio divestitures, bring the company approximately three-quarters of the way through its previously announced restructuring plans. The aim of this reorganization is to "strengthen [Xbox's] franchises and games by operating fewer business units, aligning groups that already work closely together, and focusing our publishing expertise."
As part of the operational changes, Activision will now oversee the Halo franchise, as well as the developers behind Age of Empires (World's Edge) and Sea of Thieves (Rare). A new, dedicated team will be established for future Halo game development, separate from ongoing Call of Duty projects. The remaining staff at Halo Studios will support existing Halo community and in-market games.
The Outer Worlds and Avowed developer Obsidian has been integrated into Bethesda. Additionally, Forza and Fable developer Playground Games and Turn 10 Studios have been merged into a single entity to work on future installments of those respective series. Mobile game developer King has also absorbed Microsoft Casual Games, known for its solitaire, sudoku, and mahjong titles.
Regarding studios affected by the July layoffs, Ninja Theory, the developer behind Hellblade, is reportedly in consultation regarding potential closure after acquisition talks failed. Undead Labs, Compulsion Games, and Double Fine have secured new publishers for their projects, including State of Decay 3. The future of Arkane, the studio behind Dishonored, remains under consultation, with discussions expected to continue through the end of the year.
These developments occur while Xbox's parent company, Microsoft, is subject to a boycott by the BDS movement due to its reported connections with the Israeli military.