Xbox is preparing its second wave of layoffs this year — Blizzard and Halo Studios could be hit

The Information reports, citing a source familiar with Microsoft's plans, that Xbox will lay off hundreds of employees this week and consolidate several of its game studios. This would mark the division's second major staff reduction this year.

Details of the studio consolidation haven't been disclosed yet, but according to the source, it could involve mergers or team movements between Xbox's publishing divisions — Xbox Game Studios, Bethesda, Activision, and Blizzard. According to The Information's reporter Aaron Holmes, an official announcement about the layoffs is expected as early as September 23.

As a reminder, in July Microsoft carried out a major round of cuts at Xbox affecting 1,600 employees, with another 1,600 planned to be laid off by the end of the company's fiscal year. That round hit developers across several studios, including id Software (DOOM), while Double Fine (Psychonauts) and Compulsion Games (South of Midnight) instead regained their independence.

Journalist Jason Schreier said on the Triple Click podcast that layoffs at Blizzard are imminent the division avoided major cuts during July's "Xbox Reset." Windows Central's Jez Corden and insider NateTheHate have also hinted at possible major changes at Halo Studios, though there's no official confirmation of this yet.

Microsoft has not yet commented on the layoff reports or named which specific studios or how many positions could be affected. As a reminder, according to the latest reports, Xbox Game Pass may undergo major changes in 2027.