Xbox cuts 268 more jobs and Halo moves under Activision: the "reset" continues

Microsoft keeps taking the axe to Xbox. According to GameSpot, the company has announced a new wave of changes as part of what's now known as the reset of its gaming division: 268 more layoffs, the planned closure of another development studio and a major shake-up for one of its most iconic franchises, Halo, which is moving into Activision's orbit. All of this comes just before the end of Microsoft's first fiscal quarter on September 30.

Why does it matter? Because this isn't a one-off adjustment. It's the continuation of a process the company itself says isn't finished. With this move, Microsoft says it's roughly three quarters of the way through its restructuring plan, which means there are still decisions to be announced. For anyone who plays, competes or creates content around the Xbox ecosystem, the message is clear: the map of studios and franchises we knew is changing, and we still don't know what it will look like when the dust settles.

What you need to know

• 268 new layoffs affecting Halo Studios, other first-party studios, and Xbox Game Studios' leadership and central functions.
• They come on top of the 1,600 layoffs in July, which included studios Microsoft divested.
• Microsoft plans to close another development studio as part of this new phase.
• Halo changes hands and will now be tied to Activision.
• The restructuring is roughly 75% complete: more changes are coming.

A phased restructuring that shows no sign of stopping

The announcement came from Matt Booty, head of Xbox's studios, who acknowledged how hard this day is both for those leaving and for the teams staying behind, and thanked his colleagues for the work they had built together. These are the usual words in this kind of statement, but they don't change the bottom line: hundreds of professionals are out of work once again in an industry that has been stacking up cuts for years.

What stands out is the cumulative scale. Put July's round next to this one and the contrast is obvious:

The second wave is much smaller in numbers, but it strikes right at the heart of the brand: Halo Studios and the central management structure. In other words, this is no longer just about trimming dead weight at the edges; it's about redrawing who makes the decisions and who makes the games.

Halo in new hands

The most symbolic change is Halo's. For more than two decades, the Master Chief saga has been synonymous with Xbox, and the fact that its future is now tied to Activision says a lot about how Microsoft is reorganizing its catalog after buying the Call of Duty giant. The source doesn't yet spell out all the implications of this handover, so it's best not to jump to conclusions about release schedules or specific projects, but the direction is unmistakable: Activision is gaining weight in the org chart, and Xbox's legacy franchises are no longer guaranteed their old home.

Our take

Here in the Underworld Lordz newsroom, we're watching this with a mix of concern and skepticism. Concern, because every round of layoffs wipes out talent and experience that can't be rebuilt from one quarter to the next. Skepticism, because the timing of these announcements lining up with the end of the fiscal quarter leaves the impression that these decisions are driven by spreadsheets rather than a product vision. Talking about a reset sounds great in a presentation; in practice, it means closed studios and dismantled teams.

For the competitive scene, the Halo situation is especially delicate. We're talking about a shooter with a huge competitive history, one that has had its ups and downs and needs stability, clear communication and sustained support to keep its community alive. A change of hands could be an opportunity if Activision brings resources and live-service expertise, but it's also a risk if Halo becomes just another piece in a catalog managed by metrics. Competitive players don't need promises: they need to know there will be support, patches and a circuit.

As for content creators, caution is the order of the day. With the restructuring at 75%, betting your entire channel on a single title in the Xbox ecosystem right now is risky. Diversifying, keeping a close eye on upcoming announcements and not committing to any roadmap until it's official seems like the smartest move to us.

What do you think?

Halo has been the face of Xbox for as long as anyone can remember, and now its future runs through Activision while the layoffs keep piling up. We want to hear from you: do you think this change could revitalize Halo as a competitive game, or is it the beginning of the end for Xbox's identity? Drop by the team chat or our Discord and let us know.