# Microsoft cuts 268 Xbox jobs as Ninja Theory faces closure Xbox restructuring continues with studio sales and layoffs amid gaming reset - **Source:** [The Verge](https://www.theverge.com) - **Published:** 2026-09-22 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/a671d8b3-ca50-4f2b-85c8-578b6dcf06fb ## Major Xbox restructuring continues Microsoft is eliminating 268 Xbox roles across Halo Studios, first-party studios, and XGS management. This follows July's 1,600 layoffs, described by Xbox CEO Asha Sharma as the most significant restructure in Xbox history. The cuts are part of 3,200 roles to be impacted by June 2027. Xbox chief content officer Matt Booty stated these actions complete about 75% of the announced restructuring. The moves reflect Microsoft's strategic shift in its gaming business approach. ## Failed Ninja Theory sale Deals to sell Ninja Theory collapsed over summer, leading Microsoft to begin closure consultations. Two separate agreements for the Hellblade studio fell through. Microsoft will explore alternative options during the consultation period. The studio's potential closure follows similar divestitures of Double Fine and Compulsion Games, which successfully became independent. This marks another major change in Xbox's first-party studio lineup amid broader restructuring. ## Ongoing studio transitions Undead Labs is being sold under terms similar to Compulsion and Double Fine's transitions. Microsoft continues consultations about Arkane's future and the Blade game under French labor laws. These discussions are expected to continue through year-end. The studio changes represent Microsoft's effort to streamline its gaming operations while complying with local employment regulations in different regions. ## Franchise reassignments Activision is taking over the Halo franchise along with Sea of Thieves and World's Edge (Age of Empires studio). This redistribution of major IPs accompanies the structural changes across Xbox. The moves suggest Microsoft is consolidating development resources under Activision following its acquisition. The reshuffling aims to optimize franchise management within the expanded Microsoft gaming ecosystem. ## Management layer cuts The layoffs specifically target XGS management and central functions, indicating a flattening of Xbox's organizational structure. Matt Booty acknowledged the difficulty for departing employees and their teams. The cuts in management layers follow Microsoft's broader trend of reducing middle management across the company. This approach reflects current tech industry patterns of streamlining decision-making processes. ## Financial year impact The layoffs fall within Microsoft's 2027 financial year ending June 2027. The gaming division restructuring represents a significant portion of Microsoft's overall workforce adjustments. The timing aligns with typical corporate fiscal planning cycles. These cuts follow Microsoft's $68.7 billion Activision acquisition, suggesting post-merger optimization efforts. ## Employee consultation process Microsoft is following formal consultation procedures for affected studios, particularly where labor laws require it. The Ninja Theory closure process will involve employee consultations before final decisions. Similar processes governed the transitions of other studios. This approach demonstrates Microsoft's compliance with employment regulations during major restructuring. ## Strategic implications The layoffs and studio changes signal Microsoft's focus on profitability in gaming after major acquisitions. The moves may reflect changing priorities in game development strategy. The restructuring could lead to more centralized control over fewer, larger franchises. These decisions will shape Xbox's competitive position in the evolving gaming market landscape. ## Sources covering this story - https://www.theverge.com/news/998589/microsoft-xbox-layoffs-ninja-theory-closure — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._