Xbox Has Another Round of Tragic and Bizarre Layoffs

Xbox has been hit by another wave of layoffs, and this latest round may be one of the strangest yet due to some of Microsoft’s decisions.

Microsoft has confirmed that 268 roles are being eliminated across Halo Studios, other first-party teams, and Xbox Game Studios’ management and central functions as part of its ongoing restructuring.

The cuts are already drawing attention to a series of unusual circumstances, particularly surrounding Halo. Xbox revealed that Activision, the developers of Call of Duty, will be taking over development of the next Halo title, with a new team created to work on the franchise.

The timing has made the news even more bizarre. Halo Studios cinematic director Josh Daniels revealed that he was promoted shortly before being laid off. Daniels, who has spent years working across Xbox projects, said he was “promoted and laid off in the same week.” Reportedly, his promotion occurred on Monday, with his layoff following the next day as part of the wider cuts in what can only be described as a bizarre series of management decisions.

Halo Studios will reportedly remain involved with supporting existing games and the Halo community, but future development is moving away from the studio formerly known as 343 Industries.

Another painful example comes from The Coalition’s Gears of War: E-Day team. Story director Juan Vaca reportedly announced that the game had gone gold shortly before revealing that he had been affected by the layoffs right after his promotion. Going gold is typically a major milestone that signals a game has reached its final production stage, making the timing of the job cut particularly jarring and tasteless.

The restructuring also affects other major Xbox properties. Alongside Halo moving under Activision, Xbox announced that Activision’s expanded responsibilities would include World’s Edge and Rare. Meanwhile, Bethesda’s umbrella would expand to include Obsidian. Furthermore, Playground Games and Turn 10 are also being combined for Forza and Fable development.

The latest layoffs are part of a much larger Xbox reset. Microsoft previously announced plans for thousands of reductions across its gaming division, with earlier cuts affecting multiple studios and teams. Xbox leadership says the restructuring is intended to reduce the number of business units and focus resources on major franchises, but for employees affected by the cuts, the changes represent another wave of uncertainty across the games industry.

For players, the biggest question now is what this means for Halo’s identity. A franchise that has historically been tied closely to Xbox’s brand is entering a new era under Activision’s leadership. Meanwhile, the people who contributed to shaping its recent direction have been laid off, leaving the future for the franchise uncertain.

Xbox has been doing great PR recently, but this grand restructuring might end up hurting the image they’ve been building up.