Source: Xbox plans to lay off hundreds of employees this week in its second major staff cut in 2026, as it also plans to consolidate several of its game studios

Hundreds of jobs are lost at Xbox, and studio structures are being reorganized this week.

Xbox is planning to lay off hundreds of employees this week, following a significant staff reduction of 1,600 employees in July. The company is also set to consolidate several of its game studios. This news emerges as reports suggest major changes may be coming to Halo Studios, with "the future of Halo" expected soon. This follows a pledge by new CEO Asha Sharma to cut an additional 1,600 jobs over the next fiscal year after the initial July layoffs. The exact studios slated for consolidation have not been specified.

These layoffs and consolidations indicate a significant restructuring within Xbox's gaming divisions, likely aimed at streamlining operations and reallocating resources. The timing, following a major cut in July and occurring before year-end, suggests a concerted effort to reshape the company's gaming portfolio and cost structure. The potential impact on franchises like Halo, if its studios are affected, could have broader implications for Microsoft's first-party content strategy and future game development pipelines.

This move signals a period of consolidation and efficiency drives across major gaming publishers, potentially mirroring broader trends in the tech industry. Companies are under pressure to demonstrate profitability, leading to difficult decisions about workforce and studio management. Developers and players alike will be watching to see which studios are affected and how these changes influence the quality and direction of future game releases from Microsoft's vast gaming ecosystem.