Xbox Cut 268 More Jobs and Gave Halo to Call of Duty
1,600 Xbox jobs cut in July, another 268 in September, and 3,200 in total by June 2027 — roughly a fifth of the division. The same memo moved Halo, Sea of Thieves and Age of Empires under Activision, put Obsidian under Bethesda, and left Ninja Theory facing closure. This is not routine restructuring; it is a bet on turning franchises into production lines. Here is the timeline, the numbers, and what players actually lose.
、The September 22 Memo: 268 Roles, Several Studios Reassigned
Who was cut
Per the memo published on Xbox's official news site, 268 roles were eliminated across Halo Studios, other first-party studios, and the Xbox Game Studios management and central functions layer (Source: XBOX Wire, 2026-09-22). Booty wrote that the actions taken since July, including studio divestitures, bring the company roughly three-quarters of the way through its previously announced restructuring.
Who now runs what
Activision's remit expanded beyond Call of Duty to include Rare and Age of Empires maker World's Edge, and it will develop the next Halo — led by a new team built separately from Call of Duty. Bethesda absorbed Obsidian, which continues Grounded and a new Fallout project with Bethesda Game Studios, while King took on Microsoft Casual Games. Halo Studios keeps only a small team supporting live titles such as Halo Infinite, and Ninja Theory faces closure.
二、The Third Round: Reading the 2026 "Crash 2.0" Ledger
July: 1,600. September: 268. Total: 3,200 by June 2027
In July 2026 Microsoft cut 1,600 Xbox roles and announced studio sales; by the company's own account, 3,200 jobs will be gone by the end of June 2027, about a fifth of the Xbox workforce. Earlier, in March, Epic Games laid off more than 1,000 people after a downturn in Fortnite engagement, and in May Bungie gave up on Destiny .
Industry-wide: 13,800 layoffs projected, worse than 2025
The tracking firm ASGC revised its 2026 forecast repeatedly: 8,025 at the start of the year, 14,259 on July 26, a peak of 14,666 on August 11, and 13,800 in its latest estimate — still well above 2025's full-year figure. Edge magazine calls this contraction "Crash 2.0," and Epic's Tim Sweeney has described it as the industry's worst stretch since the 1980s.
三、The Other Half of the Story: Blizzard's Union Contract
Two years of bargaining bought AI and layoff protections
In the same period, Blizzard Entertainment employees across departments ratified a union contract covering roughly 1,900 workers, including labor rights, AI protections, and protection against layoffs .
Why that matters more than another layoff headline
Because it is the one item in this cycle that changes the rules rather than just the headcount. Those clauses reach players indirectly too: where AI may be used, and how stable the teams behind a live game are, shape patch cadence and content quality.
四、Why Hand Halo to the Call of Duty Studio?
From "protecting the IP" to "operating a pipeline"
Activision, which Microsoft bought for $69 billion in 2023 (Source: The Star/Bloomberg), is the division's best machine for turning one franchise into an annual production line. Handing it Halo is not about rescuing a brand; it is about giving the brand a cadence. Putting Obsidian under Bethesda and casual games under King follows the same logic: reorganisation by output cadence, not by creative lineage.
The player's risk: a diluted identity
Halo's value comes from how distinct it feels, while Activision's organisation is built for replicable yearly releases. Those two things are not incompatible, but they are not naturally aligned either. If the new team ships "Call of Duty with shields," the quarterly numbers may look fine while the brand quietly deflates.
五、What It Means for Chinese Publishers and Players
215 licences in August, 1,362 so far in 2026
China's supply side keeps loosening: the national regulator approved 215 game licences in August (209 domestic, 6 imported), taking the January-August total to 1,362 (1,319 domestic, 43 imported), including 37 Interactive Entertainment's A Record of a Mortal's Journey to Immortality, whose parent company posted 26% year-on-year profit growth in the first half.
Chinese publishers took the centre of the hall at Gamescom
Gamescom 2026 hosted 1,743 exhibitors and 368,000 visitors from 131 countries with a first-ever full sell-out, and Chinese companies took the most central floor space with large banners and merchandise — as Ubisoft posted the largest loss in its history and Xbox cut over 3,000 jobs in July (Source: Initium Media, 2026-09-13). One industry's contraction is another's opening.
六、My Take: Microsoft Is Betting on Fewer, Bigger — and Halo May Pay
The logic underneath this reset is swapping a portfolio of many small studios for a handful of large production lines. That genuinely improves margins and is the easiest story to tell shareholders. The cost is moving creative authority from makers to business units. I expect Xbox's first-party slate to look steadier and less surprising over the next two to three years, with the next Halo as the test case: handing it to Activision is not the problem — the problem is whether anyone left is empowered to tell that team no. Come discuss in the Gghubs comments.
七、Frequently Asked Questions
How many people did Xbox cut this time, and in total?
The September 22, 2026 memo eliminated 268 roles across Halo Studios, other first-party studios and XGS management. Combined with 1,600 cuts in July, Microsoft plans roughly 3,200 job losses by June 2027, about a fifth of Xbox staff.
Who is developing the next Halo?
Activision, through a new purpose-built team separate from Call of Duty development. Halo Studios keeps a small team supporting live titles like Halo Infinite.
What does this change for players?
Mostly the release cadence. Obsidian continues Grounded and a new Fallout project under Bethesda, while Ninja Theory faces closure, leaving the Hellblade series uncertain. For contrast, Blizzard's roughly 1,900 employees now have a union contract with AI and layoff protections.