Xbox Cuts 268 Staff As Activision Takes Over Halo Studio Operations [2026 Update]

As originally reported by Rock Paper Shotgun, Microsoft has executed a major corporate reorganization resulting in the termination of 268 staff members across its gaming division. The restructuring reallocates core intellectual properties and development oversight, placing Activision in direct control of legacy franchises including Halo and Rare. Furthermore, Obsidian Entertainment has been integrated under the Bethesda Softworks operational umbrella, while the development studios responsible for Forza and Fable have merged into a single unified entity. The Communications Workers of America union confirmed the layoffs, highlighting ongoing labor friction across publisher operations. This consolidation effort represents Microsoft's aggressive post-acquisition realignment, aiming to streamline production pipelines and optimize capital allocation across premier studios. As highlighted when , the publisher prioritizes operational efficiency over decentralized studio autonomy. The decision fundamentally alters project management, title execution, and resource distribution across flagship Xbox gaming properties.