Microsoft announced the layoff of 268 Xbox employees on Tuesday, September 22nd. These employees belonged to Halo Studios. This change is part of what has been described as the 'most significant restructuring in Xbox history,' according to a statement signed by executive Matt Booty.
According to Matt Booty, two separate deals to acquire the studio Ninja Theory, responsible for the title Hellblade: Senua’s Sacrifice, did not materialize. Consequently, Microsoft is in a consultation period regarding the possible closure of the studio if it cannot find a new buyer, as reported by The Verge.
These layoffs are part of a larger plan aimed at eliminating a total of 3,200 positions associated with Xbox by the end of June 2027. Two months prior, Microsoft had already made cuts to approximately 1,600 jobs and relinquished control of four studios, affecting teams from various companies linked to the company, including Bethesda, ZeniMax Online, and id Software.
The new Xbox CEO, Asha Sharma, aims to increase the division's profit margins and direct investments toward Microsoft's most important franchises, such as The Elder Scrolls and Fallout. Even so, previous cuts also affected teams directly linked to these two series, in addition to id Software, known for the games Doom and Quake.
These recent adjustments follow a reorganization that began several months ago. In June, Tecnoblog had anticipated that Microsoft was preparing large-scale layoffs and changes to the Xbox business model, encompassing expense reduction and a review of investments in different areas.
At that time, the division was under pressure to control costs after years dedicated to investments in infrastructure, content, and hardware. The strategy outlined under Sharma's leadership also included a reassessment of game development and an intensified focus on franchises considered crucial for Xbox.
The reorganization became more visible in July. In addition to layoffs, Microsoft began unwinding some acquisitions made during the previous administration led by Phil Spencer, who had increased the number of internal studios to strengthen the Xbox Game Pass catalog.
In a statement issued during the first phase of cuts, Sharma declared that the changes aimed to give the division 'more focus, more discipline, and more clarity.' The executive also assured that Microsoft would maintain its investment level in Xbox, even with the reduction in workforce and the departure of certain studios.