Xbox Shifts Halo to Call of Duty Studio as Layoffs Continue

September 25, 2026 - 22:29

Xbox faced another difficult week as the company confirmed 268 additional layoffs, part of the 3,200 job cuts first announced in July. That brings the total reduction to roughly three-quarters of the planned number. The latest round landed hardest on Halo Studios, affecting both development staff and the management layers that Asha Sharma has publicly discussed in recent months.

The more significant development involves what could be described as a reverse acquisition. After spending 69 billion dollars to acquire Activision Blizzard, Xbox is now transferring its most valuable first-party franchise to the publisher it purchased. The next flagship Halo title will be handled by a dedicated team at the studio known for Call of Duty.

The arrangement seems strange at first glance, but there is logic behind it. Companies that focus on a single discipline often generate more value than those trying to manage everything internally. The original Halo games were built by small, focused teams working against difficult odds. This move reflects a broader shift in how large gaming organizations approach development, favoring specialized studios over centralized control. Whether this strategy pays off for the franchise remains to be seen, but it marks a clear departure from how Xbox has handled its flagship series for the past two decades.