Xbox has laid off 268 employees as part of its ongoing organizational reset, a process Xbox wire reports is now three-quarters complete. The workforce reductions impact various first-party studios and management layers. This restructuring sees several studios consolidating or changing their focus.
Two agreements have fallen through for Senua studio Ninja Theory, leading to consultation regarding its future. Similarly, Arkane is still undergoing a consultation process. Compulsion Games and Double Fine have transitioned to independent operations, retaining their back catalogs and intellectual property. Undead Labs has also made a similar move but will release State of Decay 3 on Game Pass at launch.
Notable studio realignments include World's Edge, the studio behind Age of Empires, and Rare joining Activision. Activision will also form a new team dedicated to the next Halo game. While 343 Industries will maintain a small staff to support existing Halo titles and the community, it will no longer be developing new entries in the series. Obsidian will join Bethesda, continuing work on Grounded and a new Fallout project. Microsoft Casual Games will integrate with King, and Playground Games will merge with Turn 10 Studios to jointly focus on the Forza and Fable franchises.
Activision president Rob Kostich stated that the company is "thrilled to welcome Halo, Rare, and World’s Edge to Activision," emphasizing a goal to "make the greatest Halo game ever." He added that a specialized team is being assembled to deliver the next chapter of the franchise. Xbox leadership stated that the immediate focus is on supporting affected employees, with plans for an all-Xbox team town hall to reflect on progress and look ahead to upcoming game releases.