Microsoft Xbox cuts 3,200 jobs, transfers Halo to Activision in major restructuring
Microsoft's Xbox division is undergoing its largest restructuring, planning to cut approximately 3,200 jobs by fiscal 2027. The reorganization includes transferring the Halo franchise and Rare studio to Activision, proposing the closure of Ninja Theory, and eliminating 268 roles. Xbox CEO Asha Sharma cited profit margins 3-10 times lower than competitors. Gaming revenue fell 7% in fiscal Q3 2026, with hardware revenue down 33%. About 75% of the restructuring is complete.
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Microsoft Xbox Cuts 3,200 Jobs by 2027 Amid Low Profitability and Falling Hardware Sales
Microsoft's Xbox gaming division is undergoing a major restructuring, planning to cut approximately 3,200 jobs by the 2027 fiscal year, according to a report from Sina Finance. The layoffs, announced by new Xbox CEO Asha Sharma, are part of the largest reorganization in Xbox history, aimed at addressing low profit margins, declining console sales, and a weakening core business. As of late September, about 75% of the restructuring was complete, with 268 positions eliminated at Halo Studios and other units. Sharma stated that the company's profit margins are 3 to 10 times lower than comparable platforms and publishers. Microsoft's fiscal Q3 2026 results showed a 7% drop in gaming revenue, with Xbox hardware revenue falling 33% year-over-year. The company also raised Xbox console prices by up to $150 due to rising storage costs. The report notes that Xbox Series X|S sales significantly trail PlayStation 5, with a gap of over 58 million units. An Ampere analysis cited in the article suggests cloud gaming could save players up to 57% over eight years compared to owning a next-generation console.
Read sourceHalo franchise moves to Activision as Xbox announces layoffs in restructuring
Microsoft's Xbox division is undergoing a major restructuring that includes laying off hundreds of employees and moving the development of the next 'Halo' game to Activision, the publisher of Call of Duty. The Washington Post reports that the iconic Halo franchise will be managed under Activision, which Microsoft acquired in 2023. Xbox Wire, Microsoft's official blog, published a post titled 'Continuing Our Reset' addressing the changes. The Information reported exclusively that Xbox will cut hundreds of jobs and consolidate game studios. GeekWire described the move as a significant Xbox overhaul, noting that Microsoft is shifting the next Halo game to Activision. The Verge characterized the development as Activision taking over Halo as part of a massive Xbox shake-up. The layoffs represent another round of job cuts at Microsoft's gaming division following the acquisition of Activision Blizzard.
Read sourceXbox Layoffs Continue as Activision Takes Over Halo Development in Major Reorganization
Multiple news outlets report that Microsoft's Xbox division is undergoing a massive reorganization, resulting in hundreds of additional layoffs, including roles in Washington state. As part of this shake-up, Activision, which Microsoft acquired in 2023, will take over development of the next 'Halo' game from 343 Industries. The Hollywood Reporter, The Information, The Seattle Times, and The Verge all cover the story, citing ongoing restructuring and studio consolidation. Xbox Wire, Microsoft's official blog, published a post titled 'Continuing Our Reset' addressing the changes. The layoffs are part of a broader trend of job cuts in the tech and gaming industries following major acquisitions.
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Microsoft Lays Off About 500 Employees, Mostly in Xbox Gaming Division
On September 22, Microsoft initiated a new round of layoffs affecting approximately 500 employees, with the majority concentrated in its Xbox gaming division. Smaller numbers of positions in other business units, including cloud and artificial intelligence, were also impacted. The move is part of a broader effort to streamline Microsoft's gaming operations following years of expansion and large acquisitions. Xbox is reportedly aiming to reduce its workforce by about 20% by the end of the current fiscal year, while also restructuring its studios and reviewing its portfolio of retained projects. According to a business restructuring memo from Xbox executive Matt Booty, the company has completed roughly three-quarters of the previously announced reorganization tasks since July, including studio divestitures. The report also details a severance package for affected U.S. employees, offering most up to 39 weeks of base salary, a minimum 60-day notice period, and additional compensation based on tenure.
Read sourceXbox transfers Rare and Halo to Activision, proposes closing Ninja Theory, cuts 268 roles
Microsoft's Xbox division is undergoing a major restructuring, as reported by multiple outlets. According to GamesIndustry.biz, Xbox is transferring the Rare studio and the Halo franchise to Activision, proposing the closure of Ninja Theory, and confirming another 268 roles cut. Xbox Wire's official post, titled 'Continuing Our Reset,' frames these moves as part of a broader organizational reset. The Verge comments that 'Xbox is barely Xbox anymore,' reflecting on the strategic shift. The Information reports an exclusive that Xbox will cut hundreds of jobs and consolidate game studios. The Seattle Times adds that Microsoft layoffs are hitting hundreds in Washington state again, with Xbox roles included. These actions represent a significant consolidation of Microsoft's gaming assets following its acquisition of Activision Blizzard, moving key studios and franchises under the Activision umbrella while eliminating other teams and positions.
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