Mass firings and sudden studio closures have become all too common in the gaming industry lately, and not even Microsoft, the biggest publisher out there, has managed to avoid them.
The company just cut about 4% of its workforce, which means more than 9,000 jobs were lost, and while most of those layoffs happened outside the gaming division, Xbox teams still felt the impact, with one studio, The Initiative, closing completely and several projects being cancelled.
Halo Studios Feels the Strain
In an internal memo, Xbox head Phil Spencer described these cutbacks as a necessary step to “remove layers of management to increase agility and effectiveness.” But for developers caught in the middle, it means more uncertainty moving forward. Among the cancelled games is Everwild, a long-awaited project from British developer Rare, as well as an unannounced sci-fi MMORPG that was in the works at ZeniMax Online. King, the studio behind Candy Crush, was also affected and is letting go of around 200 employees.
Unfortunately, the list goes on. According to a recent report from Engadget, Halo Studios was also hit by this latest wave of layoffs, piling more pressure onto a team that was already worn down by long-standing tensions. At least five people were let go, and a developer who spoke with the outlet said the cuts have only deepened an already-low team morale.
“I’m still frustrated that Phil’s email talked about this being Xbox’s most profitable year while announcing layoffs in the same breath,” the developer told Engadget. “It felt like a slap in the face.”
Last year, 343 rebranded as Halo Studios and confirmed that future games would be built using Unreal Engine 5 instead of its Slipspace Engine. Since then, fans have speculated endlessly about what’s next for the iconic franchise. Popular theories include a new mainline Halo entry, a remake of Halo: Combat Evolved, or an expanded Master Chief Collection that could finally bring the series to Nintendo and PlayStation consoles.
Despite that optimism, the atmosphere at the studio remains tense, and at least one project was recently “in crisis.”
“I don’t think anybody is really happy about the quality of the product right now,” the developer said. “There’s been a lot of tension and pep talks trying to rally folks to ship.”
The same employee added that Xbox as a whole “feels years behind the curve in game development,” which has led to wasted time and effort across teams struggling to get projects out the door.
Even with these setbacks, the company is expected to make a major announcement at the Halo World Championships 2025, which will take place in Seattle from October 24 to 26.