Ethan Crossfield 
Players should wait for official confirmation before drawing conclusions about Xbox’s upcoming games. A new report says hundreds of employees could be affected by another round of layoffs this week, while Microsoft-owned studios may be merged to reduce the company’s overall footprint.
What changed at Xbox?
The Information, cited by Insider Gaming, reports that Xbox is preparing a second wave of job cuts. The report attributes the information to someone familiar with the company’s plans and says the layoffs could affect hundreds of employees. It also claims that Xbox is considering consolidating several owned studios, which would place teams under shared organizational structures rather than necessarily closing them outright.
The report does not identify the studios involved or explain how development projects could be affected. As a result, players should treat the potential mergers as unconfirmed until Microsoft provides more details.
Which studios and franchises may be affected?
Leaker NateTheHate reportedly backed up the broad claims in a ResetEra discussion. According to that account, Halo could be consolidated under Activision-Blizzard alongside other unnamed studios. However, no complete list of affected teams has been provided.
The future of Halo Studios, formerly known as 343 Industries, is also unclear. When asked whether the team would continue making Halo games or move to another franchise, NateTheHate said the studio’s fate was not known. That leaves the franchise’s internal structure uncertain, but it does not confirm that development has stopped or that Halo is changing direction.
What happens next for Xbox?
The reported restructuring follows a turbulent year for Xbox. Phil Spencer and Sarah Bond left the company in February, after which Asha Sharma became Xbox’s CEO. In July, Sharma announced that 3,200 Xbox employees would lose their jobs by the end of fiscal year 2027; 1,600 positions were eliminated immediately.
Four studios also separated from Xbox during the broader restructuring. Double Fine and Compulsion Games returned to independent development, while Ninja Theory and Undead Labs moved into new arrangements with different owners. Sharma has described the wider strategy as a reset prompted by weak growth in areas including Game Pass and Xbox’s multiplatform approach. Microsoft has not yet confirmed the reported second wave or the proposed studio consolidations.
What players should know
- A new report says hundreds of Xbox employees could be affected by layoffs this week.
- Microsoft-owned studios may be merged, but no complete list of teams has been confirmed.
- Halo is reportedly being consolidated under Activision-Blizzard, though the claim remains unverified.
- The future role of Halo Studios has not been established.
- Microsoft has already announced 3,200 job cuts by the end of fiscal year 2027, including 1,600 layoffs announced in July.
Expert View
The reported changes suggest Xbox’s announced reset may be moving from workforce reductions toward a broader reorganization of its studio network. That could streamline management, but it also creates uncertainty around team identities, project ownership, and long-term franchise plans. Until Microsoft confirms the layoffs and consolidation details, players should avoid treating the reports as evidence of cancellations or major changes to upcoming games.
