MSFT Layoffs: Microsoft Cuts 268 Xbox Jobs As Gaming Reset Deepens

• Microsoft is cutting roles across Halo Studios, first-party studios, and Xbox Game Studios management and central teams.
• Microsoft has completed about three-quarters of the gaming division restructuring it announced in July.
• The tech giant plans to cut about 3,200 Xbox jobs during fiscal 2027

Microsoft (MSFT) was in focus on Tuesday, after the technology giant announced another round of workforce reduction in its Xbox business, eliminating 268 roles as it moves ahead with a major restructuring of its gaming division.

MSFT shares were down about 1.3% at the time of writing.

Xbox Restructuring Deepens

The cuts affect Halo Studios, other first-party studios and Xbox Game Studios’ management and central teams. Microsoft has now completed about three-quarters of the restructuring it announced in July, including studio sales. 

“The goal is to strengthen our franchises and games by operating fewer business units, aligning groups that already work closely together, and focusing our publishing expertise,” Xbox Chief Content Officer Matt Booty said in a memo Tuesday.

Microsoft Could Close Ninja Theory

As part of the reorganization, Activision will take control of World’s Edge and Rare studios and will develop the next Halo game through a dedicated team separate from Call of Duty. A smaller team at Halo Studios will continue supporting existing Halo games and the community.

Microsoft is also considering closing Ninja Theory after two proposed deals to divest the studio fell through.

The latest moves are part of the broader Xbox reset announced in July. The company plans to eliminate about 3,200 Xbox roles, roughly 20% of the division, during fiscal 2027, including about 1,600 positions cut in July.

Broader Job Cuts Reported

The reductions extend beyond Xbox. According to Business Insider, Microsoft is cutting around 500 jobs in the latest round, including positions across gaming, cloud, and AI operations.

The latest layoffs follow broader company-wide cuts in July, when Microsoft announced plans to eliminate roughly 4,800 jobs, or about 2.1% of its global workforce.

Chief People Officer Amy Coleman said those reductions were concentrated largely in Microsoft’s Commercial and Xbox organizations. The company also said the eliminated positions were “not being replaced by AI,” although AI is changing how work is done.

Retail’s Take On MSFT 

Retail sentiment surrounding MSFT on Stocktwits turned ‘neutral’ from ‘bearish’ over the past 24 hours.

The stock has gained around 4.7% so far in 2026, underperforming the Roundhill Magnificent Seven ETF’s (MAGS) near 12% gains.

Also read: CMPX Stock Crashes To Over 2-Year Lows — Why FDA Wants Another Cancer Therapy Trial Before Key Marketing Filing

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