Xbox’s Restructuring Process is Not Yet Complete

Xbox has announced new layoffs and studio changes as part of its extensive restructuring process continuing throughout 2026. The most visible steps in this process were the loss of 268 more employees in September, Rare’s acquisition by Activision, Obsidian Entertainment’s merger with Bethesda, and Halo Studios’ move to Activision for new game development. However, Matt Booty’s latest message to employees clearly shows that the major transformation in Microsoft’s gaming division is far from over.

Approximately 75% of Xbox Restructuring Complete

According to Matt Booty’s statement on September 22nd, with studio sales, layoffs, and organizational changes since July, approximately three-quarters of the previously announced restructuring is complete. This statement suggests that further decisions may be made by Xbox in the coming months.

The company had previously announced that a total of 3,200 positions would be eliminated throughout the fiscal year. The first major phase of this occurred in July, with a further 268 employees affected in the latest wave. Therefore, the remaining part of the announced plan may include further layoffs, but Microsoft has not yet shared the scope of this.

Activity continues on the studio side as well. In addition to Rare joining Activision and Obsidian joining Bethesda, a dedicated team is being formed under Activision management for a new Halo game. The potential deal for Ninja Theory also fell through during this restructuring period.

It is not yet known when Microsoft will take the remaining steps. The company only states that the restructuring will continue throughout FY27. Therefore, it is possible to see further studio mergers, management changes, or additional staff cuts in the coming period. For now, it has not been announced which teams are next in line, and the severity of the remaining process remains unclear. What is certain is that despite the significant steps Xbox has taken so far, the transformation process is not yet complete.

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