Halo Franchise Shifts to Activision as Xbox Cuts 268 Jobs and Former Devs React

Key points

• Xbox cut 268 jobs, including many at Halo Studios, as part of a broader restructuring that is 75% complete.
• The next mainline Halo game will be developed by a new team at Activision, separate from Call of Duty.
• A small team at Halo Studios will remain to support existing Halo games, the community, and esports.
• Former Halo developers, including Bonnie Ross, Kiki Wolfkill, and Marcus Lehto, reacted with shock and frustration to the layoffs and the shift to Activision.
• The restructuring includes other changes, such as Obsidian joining Bethesda, King joining Microsoft Casual Games, and the merger of Playground Games and Turn 10.

Background

This development follows a series of layoffs and studio reorganizations at Xbox, which began in July 2026. The restructuring is part of a broader effort by Xbox CEO Asha Sharma to cut costs and consolidate game studios under fewer publishers. Previous layoffs included 4,800 jobs globally in July, and the current cuts are part of a larger plan to shed about 3,200 roles by the end of the fiscal year.

How outlets are covering it

Kotaku highlighted the emotional reactions of former Halo developers, emphasizing the 'brutal' and 'heartbreaking' nature of the layoffs. Xbox Wire provided the official memo from Matt Booty, detailing the restructuring and the shift of Halo to Activision. GeekWire focused on the broader context of Microsoft's layoffs, including cuts in cloud, AI, and marketing, and the impact on the Seattle region. Windows Central provided a detailed breakdown of the studio reorganizations, including the merger of Obsidian with Bethesda and the closure of Ninja Theory.

Why it matters

The shift of Halo to Activision and the significant layoffs at Halo Studios mark a major change in the development of one of gaming's most iconic franchises. The restructuring reflects Microsoft's efforts to cut costs and consolidate its game studios, which could have long-term implications for the future of Halo and other Xbox franchises.

What to watch

The next mainline Halo game will be developed by a new team at Activision, with a focus on creating a 'greatest Halo game ever.' The remaining staff at Halo Studios will continue to support existing games and the community. Microsoft will hold a town hall on October 6 to reflect on the restructuring and look ahead to the future of its game lineups.