XBOX is in a complicated situation, but Asha Sharma, the brand’s new head, is trying to turn things around with radical changes to the organization. The “reset” was launched in the middle of this year, and the second phase of that process officially began this week. Such news alarmed fans of Blizzard Entertainment.

The community’s concerns are completely understandable, as the studio had just celebrated one of the most exciting BlizzCon events in recent years. And because this restructuring resulted in numerous layoffs and other changes across Microsoft’s studios, players feared that some of Blizzard’s new projects could be at risk.

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Blizzard Was Spared From XBOX’s Mass Layoffs

At the beginning of this week, the first rumors began to emerge claiming that Microsoft would carry out another round of staff cuts. The sources were mostly accurate, as during the morning of September 22, 2026, the next wave of layoffs was confirmed.

Through a statement on the XBOX blog, Matt Booty, head of XBOX Game Studios, announced the elimination of 268 positions across multiple areas of the company, including Halo Studios, administrative departments, and other teams. It was also revealed that the Master Chief franchise will be handed over to Activision.

Before the cuts and organizational changes were confirmed, Jason Schreier, a journalist for Bloomberg, said on his podcast that layoffs at Blizzard were imminent; however, Microsoft’s official announcement this Tuesday does not mention the company behind World of Warcraft and Overwatch.

Did Blizzard also suffer staff cuts? Game Developer saw an email that the studio sent to its employees, indicating that the company, or at least the World of Warcraft department, was not affected by “today’s announcements.”

An XBOX representative confirmed the authenticity of the email, but did not provide further details. While the team behind the MMORPG is safe, it is unknown whether employees working on Overwatch, Diablo, and other projects within the organization were as lucky. It is expected that they were, but we will have to wait for a more concrete confirmation.

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Blizzard Entertainment Is Working on Many Projects

Ultimately, the studio has its hands full. During BlizzCon 2026, which took place in the middle of September, the company announced numerous projects from some of its most iconic franchises.

During the live presentation, the studio revealed that Xal’atath, one of the most important characters in World of Warcraft, will join the Heroes of the Storm roster as a playable hero. Along similar lines, the event revealed new details about Midnight Eclipse and The Last Titan, the next major updates for WoW.

There was also news related to Overwatch. The developers showed a new trailer that introduced Doctrine, the next hero. They also confirmed a crossover with Cyberpunk: Edgerunners.

During the BlizzCon 2026 broadcast, there were 2 announcements that stood out: the first was the official reveal of StarCraft, a new shooter set in the same universe as the science-fiction franchise. The project is still in its early stages of development, so it will not debut until 2030. XBOX confirmed that it will not be exclusive.

Finally, the second piece of news that stole the spotlight was Diablo V, the next main installment in the demonic-themed series. Its release is closer, as it will debut at some point in 2029. You can check out all the event announcements on this page.