Xbox laid off another 268 of its workers Tuesday. The move is the latest in the staff-wide reduction plan that was announced in July, which will reduce Xbox’s total number of employees by 3,200.
1,600 Xbox employees were previously laid off in July. The latest cuts bring the Microsoft division roughly three-quarters of the way to its stated goal.
As part of the company’s larger restructuring, Xbox chief content officer Matt Booty announced in an internal memo Tuesday that “Call of Duty” studio Activision will produce Microsoft’s next “Halo” game. The popular gaming franchise had previously been helmed initially by “Halo” creator Bungie and later Halo Studios (formerly 343 Industries).
In order to compensate for its new assignment, Activision will be rolling out a new “Halo” team that will operate separate from the studio’s ongoing “Call of Duty” plans and assignments. Meanwhile, a small team of Halo Studios employees will continue to provide support for the “Halo” community and the franchise’s games in-market.
“The actions completed since July, inclusive of the studio divestitures, bring us roughly three-quarters of the way through previously announced restructuring,” Booty wrote in his memo to staff. “I am deeply grateful for what our colleagues have built, and I know how difficult today will be for those leaving and the teams around them.”
As part of the company’s latest restructuring moves, Bethesda will also absorb Obsidian and work with the studio on a new “Fallout” game. Additionally, “Forza” developers Playground and Turn 10 are merging to form one studio focused solely on creating new “Forza” and “Fable” games, while King is set to absorb Microsoft Casual Games.
Following in the footsteps of Compulsion and Double Fine, Undead Labs (“State of Decay 3”) has officially separated from Xbox and become its own, independent employee-owned studio as well. Booty, however, announced that no such agreement has come together for Ninja Theory. While Xbox intends to continue exploring other paths for the game developer, the company is now consulting with Ninja Theory employees about a proposed closure of the studio.
You can read Booty’s full internal memo below.
Team,
I’m writing to share several updates as part of the XBOX reset outlined earlier this year.
First, we are eliminating 268 roles across Halo Studios, other first-party studios, and the XGS management and central functions layer. The actions completed since July, inclusive of the studio divestitures, bring us roughly three-quarters of the way through previously announced restructuring. I am deeply grateful for what our colleagues have built, and I know how difficult today will be for those leaving and the teams around them.
Second, we are reorganizing our studios. The goal is to strengthen our franchises and games by operating fewer business units, aligning groups that already work closely together, and focusing our publishing expertise.
- Activision will expand its remit to World’s Edge, as well as Rare. Activision will also be developing the next Halo title, led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty. A small team at Halo Studios will continue supporting the Halo community and games in-market.
- Bethesda will expand its remit to include Obsidian, which will continue its current projects, including Grounded, as well as the new Fallout project made in collaboration with Bethesda Game Studios.
- King will expand its remit to include Microsoft Casual Games, uniting our two global leaders in casual game design and live operations.
- Playground and Turn 10 will come together as one studio focused on the Forza and Fable franchises. These two studios have been creative and franchise partners for over a decade, and today’s changes will formally move their work into one team.
Third, an update on our studio divestitures: In August, Compulsion and Double Fine returned to management with their IP, back catalogs, and runway funding. Undead Labs has now successfully transitioned on similar terms and, with a new publisher, will release ‘State of Decay 3’ day one on Game Pass. Unfortunately, two separate agreements for Ninja Theory fell through. We will now begin consultation with employees on a proposed closure while continuing to explore other paths forward. Consultation with Arkane remains underway and is expected to continue through the end of the year.
Today, our focus should be on supporting those affected and treating one another with care and respect. I will spend time with our studios over the next week. At our October 6 town hall, we will come together as an ALL-XBOX team to reflect on our progress and look ahead to one of the strongest game lineups in our history.
Matt
