- Xbox is planning to conduct hundreds of layoffs in a second major staff reduction following July’s "XBOX Reset" restructuring.
- According to The Information, the company also plans to consolidate several of its game studios.
- Xbox will reportedly officially announce the new round of layoffs tomorrow, September 23, 2026.
Xbox is reportedly planning its second major round of job cuts this year after the “XBOX Reset” restructuring in July, with hundreds of layoffs this week, and plans to consolidate multiple game studios. The Information’s tech reporter Aaron Holmes also revealed that Xbox will officially announce the layoffs tomorrow, September 23, 2026.
The new round of layoffs will instead consolidate several video game studios into a single unified entity. However, it’s unclear which studios Xbox is planning to consolidate. The Information revealed this exclusive information after speaking with “someone briefed on the plans”.
This lines up with Jason Schreier’s statement that more layoffs are coming to both Xbox and Blizzard, despite Blizzard being Xbox’s top-performing studio this year. Popular industry insider NateTheHate has also implied that Halo Studios will also be a part of the layoffs.
At the same time, the series will head in a completely new direction, which aligns with reports that Microsoft would hand over Halo to Activision. In July, CEO Asha Sharma led a major restructuring that cut 3,200 Xbox jobs and saw the company part ways with four studios as part of the “XBOX Reset”.
Sharma announced the “XBOX Reset” plan to improve profitability margins, which have been operating at 3-10x lower than their competitors. Meanwhile, they would push Xbox Game Pass to drive further growth.
However, recent reports suggest Microsoft plans to remove day-one releases from Xbox Game Pass starting in 2027. Nothing has been officially confirmed.
Following the July Xbox layoffs, Sharma also said the company would focus more on developing its flagship titles such as Elder Scrolls and Fallout while downsizing smaller studios the previous Xbox leadership acquired over the years.
Currently, Xbox has added Hideo Kojima’s PHYSINT to its coterie of flagship games, after Sony tried to cancel it. Since this is an expensive game, it also might be why Xbox is conducting a new round of layoffs to make space for Kojima’s action-espionage title. But we’ll have to wait and see Xbox’s official statement on the layoffs, likely dropping tomorrow.
