The organizational changes come straight from Microsoft. Daniels' own employment status comes from his public post, as reported by ixbt.games. Microsoft has not named any individual employees affected by the cuts.
Microsoft's "Continuing Our Reset" memo cuts 268 Xbox roles and hands Halo to Activision
The announcement ran on Xbox Wire under the title "Continuing Our Reset." It was a message from Matt Booty, Xbox's executive vice president and chief content officer, sent to Xbox employees worldwide. The first of its three points was the job cuts. Booty wrote that Microsoft is "eliminating 268 roles across Halo Studios, other first-party studios, and the XGS management and central functions layer."
The 268 figure covers all of those groups together. Microsoft hasn't broken it down by studio, discipline or location, so it would be wrong to say Halo Studios lost 268 people on its own. Game Informer, Variety, GeekWire, Game Developer and The Hollywood Reporter all reported the figure the same way, and Game Informer wrote that Halo Studios in particular has been significantly impacted.
The memo's second point matters more for the franchise. From now on, Activision will oversee World's Edge and Rare and will also develop the next "Halo" title, which Booty says will be "led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty." "A small team at Halo Studios will continue supporting the Halo community and games in-market."
Activision president Rob Kostich said in a statement quoted by Variety that "We have already begun assembling a purpose-built team, unique in capability and talent, ready and excited to deliver this next chapter with the community." Neither company has said who is on that team, where it is based, or whether any current Halo Studios developers are moving to it.
Josh Daniels' layoff, from Turn 10 to the Halo: Campaign Evolved credits
Daniels' career shows the kind of senior creative role these cuts are reaching. In July 2024 he announced on LinkedIn that he was joining 343 Industries, the studio later renamed Halo Studios, as Cinematic Director. Gamereactor covered the move at the time and noted that he had spent many years as a cinematic lead at Turn 10, the Forza Motorsport developer. His post said he was leaving "the better part of a decade" at one studio.
His title appears in official records. The Halo: Campaign Evolved credits page on Halo Waypoint lists "Josh Daniels — Cinematic Director" under Cinematics. Christopher West is listed as Narrative Cinematic Artist, credited through the staffing firm Aquent LLC. The credits confirm Daniels' role on the game but say nothing about his employment after September 22.
The layoff itself rests on Daniels' own public statement, reported by ixbt.games. He said he was among the Halo Studios employees affected, that he would take a short break and go offline, and that he was open to cinematic direction or production roles. No other outlet has independently confirmed his individual departure. His account is plausible given how heavily the memo hit Halo Studios, but it is still his account.
The "promoted and laid off in the same week" line is his description. The public record doesn't show exactly when the promotion happened or what it was. He had already been Cinematic Director since 2024, so the promotion may have been a change of level within that title, but that is a guess, and no source explains it.
Why Halo Studios is shrinking to a support team
Wikipedia's summary of Halo Studios' history, citing Engadget, notes earlier internal layoffs and an anonymous former employee describing tension over unspecified projects. That background is secondhand, but it shows the studio has been reorganized before.
This round is different because of what the memo says about the next game. As GeekWire describes it, a reduced team will stay at Halo Studios (formerly 343 Industries) in Redmond to support existing Halo games, the community and esports. Supporting "games in-market" is clearly defined. New mainline development is not on that list.
The memo does not say Halo Studios is closing, and it gives no size for the team that remains. It also doesn't say whether Halo: Campaign Evolved's schedule, platforms or features are affected. Claims that the remake is delayed or cancelled go beyond anything Microsoft has published.
Moving Halo to Activision has drawn criticism. Game Informer called it huge news, noting that the makers of Call of Duty are now also in charge of Halo, and argued it is perhaps the clearest example of how massive studio mergers can stifle competition, with the two series hailed as the pillars of the first-person shooter now made under the same roof. Microsoft's stated reason is simpler: fewer business units and more concentrated publishing expertise. The memo's promise that the Halo team will be separate from Call of Duty is the company's answer to that concern, and so far it is only a promise.
What else moved in the Xbox studio reorganization
Halo got most of the attention, but the memo changed reporting lines for several other studios. Bethesda adds Obsidian, King combines with Microsoft Casual Games, and Playground and Turn 10 merge into one studio focused on the "Forza" and "Fable" franchises. Booty wrote that Obsidian will continue its current projects, including Grounded and a new Fallout project being made with Bethesda Game Studios.
The Playground and Turn 10 merger links back to Daniels, since Turn 10 is where he worked before Halo. Booty described the two studios as creative and franchise partners for more than a decade and said the change formally puts their work into one team.
There are PC implications too. Activision's expanded remit covers World's Edge (known for Age of Empires) and Rare (known for Sea of Thieves). Both are major Microsoft franchises on PC and Game Pass, and they now report to Activision.
The memo also updated the studio divestitures announced earlier:
- Compulsion Games and Double Fine went independent in August, taking their IP, back catalogs and runway funding with them.
- Undead Labs has left on similar terms and will release State of Decay 3 on Game Pass on day one, with a new publisher.
- Two separate agreements for Ninja Theory fell through, and Microsoft will begin consulting employees on a proposed closure while it keeps looking at alternatives.
- Consultation with Arkane is still underway and is expected to run through the end of 2026.
Game Developer's headline summary, that Ninja Theory is being shuttered, goes a step further than the memo. Microsoft's wording is a proposed closure that is subject to employee consultation.
The September round is one part of a larger Xbox restructuring
The September cuts continue a plan Microsoft announced in the summer. Microsoft said in July that Xbox would shed about 3,200 roles by the end of its fiscal year, roughly 20% of the division. It started with 1,600 layoffs at major studios including Obsidian, ZeniMax Online Studios and id Software. Booty wrote that the actions since July, including the divestitures, have taken Xbox "roughly three-quarters of the way through previously announced restructuring."
GeekWire places the effort within Microsoft's wider strategy. It describes the cuts as the continuation of a larger effort by Xbox CEO Asha Sharma to cut costs and consolidate game studios under fewer publishers in an effort to return to growth and profitability.
GeekWire also reported that the cuts went beyond Xbox the same day. Microsoft made additional layoffs on Tuesday that extended into cloud, AI, marketing and research; the company said total reductions number fewer than 600 globally, with about 300 in Washington state. That means the 268 Xbox roles were less than half of Microsoft's September 22 cuts. Readers in Azure or AI organizations should read the day as more than a gaming story.
Microsoft has said roughly three-quarters of the plan is done, but it hasn't given a date for the rest or said which teams it will affect. The next scheduled event is an all-Xbox town hall on October 6, 2026. Booty says it will review the progress so far and preview the game lineup.
What the Halo shift means for players, PC gamers and Microsoft staff
For most people, nothing changes right away. For anyone planning around Halo's future or Microsoft employment, the direction is now clear. Current Halo games and the community are staying with a smaller Halo Studios team. Future mainline Halo development belongs to an Activision team that has not been named. Microsoft employees and contractors should expect another round of cuts before the restructuring is finished.
- Microsoft has confirmed 268 Xbox role eliminations across Halo Studios, other first-party studios and central functions, but it hasn't published a per-studio breakdown.
- The next mainline Halo game will be made by a new Activision team that Microsoft says is separate from Call of Duty. Halo Studios keeps responsibility for games already on sale and for the community.
- Josh Daniels' layoff is based on his own public statement. His Cinematic Director credit on Halo: Campaign Evolved appears on the official credits page.
- Microsoft has made no statement about delaying or changing Halo: Campaign Evolved, so be skeptical of claims that it has been cancelled or delayed.
- Age of Empires developer World's Edge and Sea of Thieves developer Rare now report to Activision, and State of Decay 3 is still coming to Game Pass on day one through a new publisher.
- About a quarter of the planned Xbox restructuring is still to come, and the October 6 town hall is the next point where Microsoft is expected to say more.
Daniels' week sums up what the September 22 memo does to Halo. He was moving up inside Halo Studios while Microsoft was already planning to hand the next Halo to a team at Activision. The existing Halo games will continue to be supported, and the community team stays in Redmond. The next major Halo game, and the creative leadership jobs that come with it, will be at Activision. The October 6 town hall and the remaining quarter of the restructuring will show how much of the old Halo Studios team is part of that.
Update: Report places Daniels’ promotion one day before Xbox layoff (September 22, 2026)
Insider Gaming reports that Josh Daniels was promoted at Halo Studios on Monday, September 21, before being laid off in Xbox’s restructuring the following day. That provides a more specific timeline than Daniels’ earlier description that he had been “promoted and laid off in the same week.”
The outlet attributes the account to Daniels’ social-media post and does not identify the new position or provide independent documentation of the promotion. Microsoft has not publicly confirmed Daniels’ job title, promotion, or individual layoff.
If accurate, the timing underscores how abruptly the Halo Studios reductions were implemented for senior creative staff. It does not change Microsoft’s official position: Halo Studios retains a smaller role supporting current games and the community, while a new Activision team takes responsibility for the next Halo title.