Xbox layoffs are hitting the company again this week. The Information reported Tuesday that Microsoft is preparing to cut hundreds more jobs and consolidate its publishing arms, the second wave of a 3,200-job reduction plan Xbox CEO Asha Sharma announced back in July.
The report broke the morning of September 22, 2026, and was quickly corroborated by The Verge’s Tom Warren, Vice, PureXbox and Massively Overpowered, all citing people familiar with Microsoft’s plans. Microsoft has not issued its own statement yet, so exact numbers and which teams are affected are not confirmed as of this writing.
What’s Actually Happening This Week
The cuts reportedly land on Xbox’s publishing side rather than a single studio. Multiple outlets describe a “consolidation” across Xbox Game Studios, Bethesda, Activision and Blizzard — the four publishing labels Microsoft has been folding closer together since last year’s reorganization. Bloomberg’s Jason Schreier added a related thread the same day, reporting that layoffs at Blizzard specifically are “coming and imminent.”
None of this is happening in a vacuum. It is wave two of a total job-cut plan Microsoft already put a number on.
Wave Two of a Plan Microsoft Already Announced
In July 2026, Sharma told staff Xbox was undergoing a “business reset,” cutting 1,600 jobs and severing ties with several internal studios, including Double Fine, Compulsion Games, Ninja Theory and Undead Labs. At the time, she said the total plan would eliminate 3,200 positions — roughly 20% of Xbox’s own headcount, against about 2% company-wide at Microsoft — by the end of June 2027. This week’s cuts are the remaining half of that number starting to land.
| Wave | When | Jobs Cut | What It Hit |
|---|---|---|---|
| Wave 1 | July 2026 | 1,600 | Studio closures — Double Fine, Compulsion Games, Ninja Theory, Undead Labs |
| Wave 2 | Week of Sept 22, 2026 | “Hundreds,” part of the ~1,600 remaining | Publishing-arm consolidation across Xbox Game Studios, Bethesda, Activision, Blizzard |
Is Halo Moving to Activision Blizzard?
The detail generating the most fan anxiety is Halo’s. The Information’s report suggests Activision Blizzard could take on a heavier role in the franchise’s development or oversight going forward. That has not been confirmed by Microsoft, and it is worth saying plainly: this is sourced to insiders, not an official announcement, and it could change before anything is made public.
It would not be the first shake-up to Xbox’s published portfolio this year. Xbox already stepped in as PHYSINT’s publisher after Sony ended its Kojima Productions deal, even as Microsoft leans on hardware like the ROG Xbox Ally X to keep growing its player base.
Who’s Making the Call
Asha Sharma became CEO of Xbox in February 2026, taking over from Phil Spencer after his retirement, and Microsoft Gaming was formally renamed Xbox under her that April. She came from outside game development, having served as COO at Instacart and a VP at Meta before joining Microsoft.
Since taking over, she has leaned on that consumer-growth background — cutting the price of Game Pass Ultimate and winding down Copilot features on Xbox. In a memo reported by CNBC on July 30, 2026, she laid out a goal of passing rivals on margin by 2030, the financial backdrop this round of cuts sits against.
Frequently Asked Questions
How many Xbox jobs are being cut this week?
Reports from The Information and The Verge say “hundreds,” but Microsoft has not disclosed an exact figure as of this writing.
What is Microsoft’s total Xbox layoff plan?
CEO Asha Sharma announced a 3,200-job reduction across fiscal year 2027 in July 2026. About 1,600 were cut in the first wave that month, with roughly 1,600 more expected by the end of June 2027.
Is Halo moving to Activision Blizzard?
It’s unconfirmed. Insider reporting says Activision Blizzard could take a bigger role in the franchise, but Microsoft has not made an official statement.
Who is Xbox’s CEO?
Asha Sharma, who became CEO of Xbox in February 2026 after Phil Spencer’s retirement, following prior roles as COO of Instacart and a VP at Meta.
Which studios were affected in the first wave of Xbox layoffs?
Double Fine, Compulsion Games, Ninja Theory and Undead Labs were among the studios Microsoft cut ties with in the July 2026 wave.
Sources
- The Verge — Tom Warren reporting on Xbox layoffs
- Vice — Xbox layoffs expected today
- Pure Xbox — layoffs on the way this week
- CNBC — Asha Sharma’s 2030 margin memo
