Microsoft lays off 268 Xbox employees as gaming business restructuring continues: Report

Microsoft is cutting 268 jobs across its Xbox gaming division as part of an ongoing restructuring of the business, an American technology news website, The Verge, reported.

The latest layoffs affect employees at Halo Studios, other first-party studios, as well as Xbox Game Studios’ management and central functions. The cuts follow the elimination of around 1,600 Xbox positions in July, which Xbox CEO Asha Sharma described as the most significant restructuring in the company’s history.

According to an internal memo from Xbox Chief Content Officer Matt Booty, as reported by The Verge, the layoffs announced today form part of a broader restructuring plan involving 3,200 roles during Microsoft’s 2027 financial year, which runs through June 2027.

Booty said the restructuring measures carried out since July, including the divestment of studios, have now completed roughly three-quarters of the previously announced process.

The restructuring has also involved Microsoft selling or spinning off several Xbox-owned studios. Double Fine and Compulsion Games have already become independent, while a proposed sale of Ninja Theory has fallen through.

Microsoft has consequently begun consulting employees over a possible closure of Ninja Theory, while continuing to explore alternative options for the studio.

The planned sale of Undead Labs is still moving forward, with Booty saying the transition has progressed on terms similar to those involving Compulsion Games and Double Fine.

Meanwhile, consultations concerning Arkane and its upcoming Blade title are continuing under French labour laws. The process at Arkane is expected to continue until the end of the year.

As part of the wider reorganisation, Activision is also taking responsibility for the Halo franchise, along with Sea of Thieves and World’s Edge, the studio behind Age of Empires.