Difficult day for those leaving: Xbox lays off employees, read full memo here
Xbox has announced a second round of lay-offs within a few months as the Microsoft gaming continues an “Xbox reset” under CEO Asha Sharma. In a memo shared on the Xbox website under the title Continuing the reset, Xbox chief operating officer Matt Booty confirmed that the company was cutting 268 jobs.
The job cuts affect employees across several studios under the Xbox banner. “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," Matt Booty told employees.
The latest cuts follow the 1,600 Xbox lay offs announced in July. These cuts are part of the 3,200 roles Microsoft had already said would be affected during its 2027 financial year, which ends in June 2027. The wider shake-up also includes studio mergers, expanded responsibilities for Activision, Bethesda and King. Before the July lay-offs, Xbox was said to have roughly 16,000 workers globally.
Xbox will also hold a town hall on October 6, where employees can discuss the division’s progress in recent months.
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 reorganising 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”- EndsPublished By: Armaan AgarwalPublished On: Sep 23, 2026 10:09 ISTAlso Read | More layoffs at Microsoft Xbox, hundreds of employees impacted in fresh roundAlso Read | Who is Asha Sharma? Meet the Indian-origin CEO resetting Xbox with 3,200 layoffsAlso Read | Microsoft layoffs: Xbox is cutting 3,200 jobs, CEO Asha Sharma writes memo to employees, read full text
