🔄 What Happened?
On September 22, 2026, Xbox announced another major phase of its ongoing restructuring.
The company confirmed 268 additional role eliminations across Halo Studios, other first-party studios, and Xbox Game Studios management and central functions. Xbox says the completed changes are now roughly three-quarters of the way through its previously announced restructuring.
✂️ 268 Roles Cut
The latest cuts affect:
- Halo Studios
- Other first-party studios
- Xbox Game Studios management
- Central functions
These cuts follow the larger restructuring announced in July, when Xbox said it planned to reduce its workforce by approximately 3,200 roles during FY27.
🧪 Obsidian Moves Under Bethesda
Obsidian Entertainment is now under Bethesda's expanded remit.
Xbox says Obsidian will continue working on its existing projects, including Grounded, as well as a new Fallout project being developed in collaboration with Bethesda Game Studios.
This is an organizational change, not an announced closure or cancellation of Obsidian's projects.
🧟 Undead Labs Has New Management
Undead Labs was originally included among studios seeking new ownership during Xbox's restructuring.
That process has now been completed.
Xbox says Undead Labs has successfully transitioned to new management with a new publisher, with State of Decay 3 still planned to launch day one on Game Pass.
So there is no current search for an Undead Labs buyer.
🪖 Other Major Changes
The restructure also includes several major organizational moves:
| Studio / Franchise | Change |
|---|---|
| Halo | Next game moves to a new Activision team |
| Rare | Moves under Activision |
| World's Edge | Moves under Activision |
| Obsidian | Moves under Bethesda |
| Playground + Turn 10 | Combine into one studio |
| Undead Labs | Transitions to new management |
| Ninja Theory | Consultation begins over proposed closure |
❓ Quick FAQ
How many Xbox roles were cut in September?
268 roles.
What happened to Obsidian?
It moved under Bethesda's expanded organizational remit.
Is Undead Labs still looking for a buyer?
No. Xbox says the transition to new management has been completed.
What happens to State of Decay 3?
Xbox says it will release day one on Game Pass.
Is Ninja Theory closed?
Not yet. Xbox has begun employee consultation over a proposed closure while continuing to explore other options.
🎯 Quick Summary
268 cuts + Obsidian → Bethesda + Undead Labs → new management + major studio consolidation.
Xbox's 2026 reset is reorganizing its first-party structure around fewer business units while continuing its broader workforce reduction.