The short answer
Microsoft cut 268 Xbox roles on September 22, 2026, as part of a round that a company spokesperson told KUOW affects 500 to 600 workers in total. KUOW and OPB reported the 268 as Xbox employees in Washington state. The Next Web, reading the memo that Xbox chief content officer Matt Booty sent to staff and published on Xbox Wire, described the 268 as roles across Halo Studios, other first-party studios and Xbox Game Studios management, without a location split, and reported that GeekWire put the Washington share of the whole round at about 300. The cuts fall under the 3,200-job reduction Xbox announced in July 2026, per KUOW.
What happened
Booty emailed staff on Tuesday, September 22, 2026, and Microsoft published the memo on Xbox Wire under the title "Continuing Our Reset," per The Next Web. The memo had three parts: the job cuts, a reorganization of studios, and an update on studios Microsoft is trying to sell, per The Next Web. Microsoft chief communications officer Frank Shaw told KUOW the layoffs are part of an ongoing course correction, that no particular role was targeted, and that the cuts affected a broad range of Xbox employees.
Who is affected
Sources describe the numbers differently. KUOW and OPB reported 268 Xbox employees laid off in Washington state, within a reduction of 500 to 600 workers that a spokesperson described. The Next Web reported that the 268 figure in Booty's memo covers Halo Studios, other first-party studios and the Xbox Game Studios management and central functions layer, and that GeekWire reported fewer than 600 cuts globally with about 300 in Washington state, including marketing and research roles. The Seattle Times, as cited by MyNorthwest and KIRO 7, put the round at roughly 450 employees companywide, and MyNorthwest reported about 300 in Washington. Business Insider reported that a small number of the roles were outside gaming, in cloud and AI, per The Next Web.
The studio changes in the memo, per The Next Web: Activision will develop the next Halo game and take over Rare and World's Edge; a small team stays at Halo Studios to support existing games and the community; Bethesda absorbs Obsidian; King takes Microsoft Casual Games; Playground and Turn 10 merge into one studio. Microsoft will open consultation on a proposed closure of Ninja Theory, the Cambridge studio, after two sale agreements fell through, and Arkane Lyon remains in consultation, per The Next Web.
When it takes effect
The cuts were announced September 22, 2026. The sources used here do not report a Washington WARN notice for this round. A WARN notice is a filing an employer makes with a state when it plans a large layoff. Booty's memo said the actions since July bring Xbox roughly three-quarters of the way through its restructuring, and it pointed to an Xbox town hall on October 6, per The Next Web.
What the company said
Shaw described the cuts to KUOW as a course correction that is still under way. In July, Xbox CEO Asha Sharma told staff the business had become unsustainably bloated and that Xbox operates at margins 3 to 10 times lower than comparable platform and publishing businesses, per KUOW. KUOW quoted her July memo: "Our business today is not healthy."
Earlier cuts at Microsoft
- July 6 to 7, 2026: Sharma's memo said Xbox would reduce its team by about 3,200 people over fiscal 2027, with about 1,600 roles eliminated that day, per Insider Gaming. Microsoft as a whole cut about 4,800 jobs, about 2.1% of its workforce, with about 600 in Washington state, per MyNorthwest and KIRO 7.
- 2025: Microsoft cut about 6,000 jobs in May and about 9,000 in July, per MyNorthwest.
Questions people ask
How many Xbox employees did Microsoft lay off in September 2026?
Microsoft cut 268 Xbox Game Studios roles, per the Matt Booty memo reported by The Next Web and per KUOW. A company spokesperson told KUOW the full round affects 500 to 600 workers, and the Seattle Times, cited by MyNorthwest, put it at about 450.
How many of the Microsoft layoffs are in Washington state?
KUOW and OPB reported the 268 Xbox cuts as Washington employees. The Next Web reported that GeekWire put the Washington total for the whole round at about 300, and MyNorthwest also reported about 300 in Washington.
Which Xbox studios were affected?
Halo Studios, other first-party studios and the Xbox Game Studios management layer, per Booty's memo as reported by The Next Web. Activision is taking over the next Halo game along with Rare and World's Edge, and Microsoft is opening consultation on a proposed closure of Ninja Theory, per The Next Web.
Is this part of the 3,200 Xbox job cuts announced in July?
Yes, per KUOW. Xbox CEO Asha Sharma's July memo set out a reduction of about 3,200 people over fiscal 2027, per Insider Gaming, and Booty's September memo said Xbox is roughly three-quarters of the way through the restructuring, per The Next Web.