Imminent Xbox Layoffs and Studio Mergers Expected Amid Rumored Major Halo Shift

A recent report indicates that Xbox is set to lay off “hundreds” of employees this week while also consolidating several of its game studios.

This news follows a series of alerts from industry insiders suggesting that unfavorable developments for Xbox were on the horizon. The layoffs come as no surprise; back in July, Xbox’s new CEO Asha Sharma announced a significant reduction in workforce, cutting 1,600 jobs and planning to eliminate a total of 3,200 positions over the next year. Recently, a well-known industry insider hinted that layoffs at Blizzard Entertainment, which avoided the initial cuts, were also on the way.

The consolidation of Xbox’s game studios, however, is a fresh development. While the report does not specify which studios will be affected, speculation is rampant. Xbox has grown substantially, especially following its acquisition spree under former CEO Phil Spencer, and now includes at least three major game publishers: Xbox Game Studios, Bethesda Softworks, and Activision Blizzard, with Activision and Blizzard operating as separate entities. This creates ample opportunity for restructuring.

One of the most credible claims, supported by reliable leaker NateTheHate, suggests that the Halo franchise may be shifted under Activision Blizzard’s umbrella. While the franchise is moving, the future of Halo Studios remains uncertain. The implication is that a new developer could take the reins of the franchise under the Call of Duty publisher.

NateTheHate also mentioned that “more than just Halo” will transition to Activision Blizzard, and that “other studios will move to different companies within Xbox.” There’s speculation that Obsidian Entertainment might shift from Xbox Game Studios to Bethesda, which would align with their current collaboration on a new Fallout title.

Sharma has committed to a comprehensive restructuring of Xbox, emphasizing a focused approach on the group’s most significant franchises. According to the report, Microsoft executives Satya Nadella and Amy Hood have decided against selling off or spinning off Xbox, opting instead to back Sharma’s reorganization efforts.

Asha Sharma is making tough decisions and is clear about her stance on accountability.