Microsoft CEO Satya Nadella described the Xbox division's restructuring efforts as 'great to see' during a recent Sources Podcast interview, even as another 268 roles were eliminated this week. The cuts hit Halo Studios, other first-party teams, and management layers, marking the second major wave after 1,600 positions were removed in July as part of a broader plan targeting 3,200 total reductions by the end of the fiscal year.

Xbox chief content officer Matt Booty outlined the moves in a memo shared on Xbox Wire, noting the actions since July have brought the division roughly three-quarters through the announced restructuring. Studio consolidations include Halo development shifting to Activision under a new team separate from Call of Duty, with a small Halo Studios group remaining for support; Obsidian moving under Bethesda; Rare and World's Edge aligning with Activision; and Playground and Turn 10 merging for Forza and Fable work.

Nadella also referenced Xbox's need for a sustainable business model to deliver games across PC and console while returning to growth next fiscal year, a mandate he had previously set. The ongoing changes follow Xbox CEO Asha Sharma's July announcement framing the effort as the division's most significant restructure, driven by the unit's margins running significantly below comparable businesses.