Juan Vaca, story director for Gears of War: E-Day, was laid off on September 22 as part of Xbox's latest round of cuts affecting over 260 employees, just four days after celebrating the game going gold. The layoff came during a broader corporate restructuring at Microsoft that also affected Halo and Forza teams, though E-Day's October 6 launch plans remain unchanged.
Xbox is laying off 268 workers as part of a broader 3,200-person reduction announced in July, with studios being reorganized and merged. Activision will develop the next Halo game as a mainline installment, taking over the franchise from 343 Industries. Several studios including Ninja Theory are being shut down while others are being spun out or absorbed into larger divisions.
Microsoft is merging Playground Games and Turn 10 Studios into a single studio to focus on Forza Horizon and Fable franchises. The consolidation leaves the future of Forza Motorsport uncertain, as Turn 10 Studios closes following significant layoffs last year.
Xbox transferred Rare and the Halo franchise to Activision, announced the closure of Ninja Theory after failed sale attempts, and cut 268 roles across studios. The restructuring includes consolidating multiple studios under different divisions and moving Halo development to a new team at Activision separate from Call of Duty.
Obsidian Entertainment is being restructured under Bethesda as part of Xbox Game Studios reorganization, shifting focus to major franchises including a new Fallout game. Microsoft's nearly decade-long Game Pass content strategy has been refocused to prioritize fewer blockbuster titles like Diablo, The Elder Worlds, and Fallout, with remasters of earlier Fallout titles also in development.
Microsoft is announcing Xbox layoffs today affecting hundreds of employees as part of a larger restructuring plan that will consolidate game studios, with a total of 3,200 Xbox positions to be eliminated by June 2027.
Xbox is preparing a second round of layoffs this week involving consolidation of game studios across Xbox Game Studios, Bethesda, Activision, and Blizzard, following an initial July layoff of 1,600 employees. CEO Asha Sharma attributed the restructuring to the company spreading itself too thin, with platform teams growing 40% while player engagement declined. The company plans to streamline management layers and refocus on core business to return to growth by 2027.