Microsoft Cuts About 500 Jobs in New Xbox Overhaul Round

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3▲0 ▼1Impact / 5
Summary · why it matters

Microsoft has begun another round of layoffs affecting roughly 500 employees, most of them concentrated in gaming, as the company pushes deeper into a sweeping Xbox overhaul while continuing to pour capital into artificial intelligence. Within Xbox, Microsoft confirmed it is eliminating 268 positions across Halo Studios, other first-party developers, and management and central functions, with a smaller number of jobs in its cloud and AI businesses also affected. The cuts extend a restructuring announced in July, when Microsoft said it would eliminate roughly 4,800 positions companywide, including 3,200 across Xbox during fiscal 2027, and Xbox chief content officer Matt Booty told employees the moves since July, including studio divestitures, put Microsoft roughly three-quarters of the way through that previously announced restructuring. The shake-up goes deeper than headcount: Activision will take greater responsibility for major Xbox franchises and is developing the next Halo title through a dedicated team, Bethesda will oversee Obsidian, and Playground Games and Turn 10 are being combined around the Forza and Fable franchises. Microsoft tried twice to sell Ninja Theory, the studio behind the Hellblade franchise, but both agreements fell through, and the company has now begun consulting employees over a proposed closure while continuing to explore alternatives. The layoffs arrive as Microsoft balances cost discipline against enormous AI infrastructure spending, with its July cuts coming as the company projected roughly $190 billion of 2026 spending, largely as booming Azure and AI demand required more data-center capacity.

Impact on assets 1

Artificial Intelligence▼ · 1 stocks
Microsoft Corporation
MSFT
▼ NegativeCapitalrelevance

Microsoft is cutting roughly 500 more jobs, including 268 Xbox positions, extending its restructuring and cost-discipline push amid heavy AI capex.

Off-coverage companies 3

Ninja Theory LtdPrivate▼ Negative
Capitalrelevance

Microsoft has begun consulting employees over a proposed closure of Ninja Theory after two failed attempts to sell the studio.

Halo StudiosPrivate▼ Negative
Capitalrelevance

Halo Studios is among the first-party developers losing 268 positions in Microsoft's Xbox overhaul.

Playground GamesPrivate± Mixed
Capitalrelevance

Playground Games is being combined with Turn 10 around the Forza and Fable franchises in the Xbox restructuring, a mixed organizational change.

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