Microsoft Cuts 268 Jobs in Xbox Division; Ninja Theory’s Future Uncertain

Microsoft is letting go of approximately 260 employees from Xbox today as part of a broader “reset” of its gaming division. This follows a significant round of layoffs in July that affected 1,600 Xbox staff, with Xbox CEO Asha Sharma calling it “the most significant restructure in Xbox history.” Today’s cuts are included in the previously announced total of 3,200 roles that will be impacted throughout Microsoft’s financial year ending in June 2027.

In a memo, Xbox chief content officer Matt Booty stated, “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, including studio divestitures, bring us roughly three-quarters of the way through the restructuring process. I am deeply grateful for what our colleagues have built, and I know how difficult today will be for those leaving and their teams.”

The restructuring also involves Microsoft divesting four Xbox studios as part of its significant gaming cuts. While Double Fine and Compulsion Games have already become independent, attempts to sell Ninja Theory have not succeeded, leading Microsoft to initiate a consultation period for a potential closure unless a new buyer is found. Booty explained, “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.”

The sale of Undead Labs is still in progress, and Booty noted it has “now successfully transitioned on similar terms” to Compulsion and Double Fine. Additionally, discussions regarding the future of Arkane and the Blade game are ongoing, in compliance with French labor laws. “Consultation with Arkane remains underway and is expected to continue through the end of the year,” Booty added.

Today’s layoffs are part of a larger reorganization within Xbox, with Activision taking over the Halo franchise, along with Sea of Thieves and World’s Edge, the studio behind Age of Empires.