2 min readNew DelhiUpdated: Sep 23, 2026 03:21 PM IST
Microsoft is laying off around 260 Xbox employees as part of its larger restructuring of the gaming business, which also includes the closure or sell-off of a few Xbox gaming studios.
The job cuts are part of the 3,200 roles expected to be impacted during Microsoft’s financial year ending July 2027. Earlier this year, 1,600 Xbox employees were fired in what Xbox CEO Asha Sharma called “the most significant restructure in Xbox history.”
Microsoft is also reportedly selling off four Xbox gaming studios. Double Fine and Compulsion Games have already become independent, but the deal to sell Ninja Theory has fallen through more than once.
Microsoft is now proceeding with a consultation period to close the studio, unless the company can find another buyer, according to a report by The Verge. Activision is taking on the Halo franchise, along with Sea of Thieves and World’s Edge, the studio behind the Age of Empires title. The deal to sell off Undead Labs is still proceeding.
“We are eliminating 268 roles across Halo Studios, other first-party studios, and the XGS management and central functions layer. The actions completed since July, inclusive of the studio divestitures, bring us roughly three-quarters of the way through previously announced restructuring. I am deeply grateful for what our colleagues have built, and I know how difficult today will be for those leaving and the teams around them,” Xbox chief content officer Matt Booty was quoted as saying.
“Unfortunately, two separate agreements for Ninja Theory fell through. We will now begin consultation with employees on a proposed closure while continuing to explore other paths forward,” Booty added.
The future of other popular titles such as Arkane and Blade are still uncertain as consultations – in accordance with French labour laws – remain underway and are expected to continue through the end of the year.
