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The recent layoffs across Microsoft and Xbox have been damming with over 9,000 employees affected and projects such as Everwild, Perfect Dark and an unannounced MMO scrapped as a result. While not affected as much by layoffs, a number of developers have been let go from Halo Studios as well, including a UI artist and a QA manager.
At the time of writing, Halo Studios is currently working on a still-unconfirmed remake of Halo: Combat Evolved, set to release on PC and Xbox platforms for the original game’s 25th anniversary in 2026. However, it seems that the project isn’t proceeding as smoothly as the team hoped.
In a report by Engadget, a current Halo Studios employee discussed the recent lay-offs at Microsoft and Xbox, specifically mentioning a memo sent by Microsoft Gaming CEO Phil Spencer. In the memo, Spencer confirmed that Microsoft Gaming is bigger than ever, but the 9,000 workers being laid off would help the company to “increase agility and effectiveness.”
“I’m personally super pissed that Phil’s email to us bragged about how this was the most profitable year ever for Xbox in the same breath as pulling the lever” a Halo Studios developer told the outlet. “I wasn’t sure what part of that I was supposed to be proud about.”
As for Halo Studios’ current project, the unconfirmed Combat Evolved Remake, the same developer explained that its development has been troubled. The upcoming project which “was recently in crisis” will be revealed at this year’s Halo World Championship in October, but that project has suffered from past lay-offs in 2023 and 2024.
With around a year-and-a-half left until release, Halo Studios still has time to turn things around, but after Microsoft cut the studio’s campaign and narrative teams in previous lay-offs, there’s a lot of work to be done.
“I don’t think anybody is really happy about the quality of the product right now,” the developer continued. “There’s been a lot of tension and pep talks trying to rally folks to ship.”
One of the biggest issues with Halo Infinite’s development was Microsoft’s push towards contract workers to help create the game, which proved troublesome with the game’s unique in-house Slipspace Engine. Now, with the shift to Unreal Engine 5, contract work should be easier, but Microsoft has changed tact.
According to the developer, Microsoft is now focusing on contracted studios, instead of individual workers, to speed up production of Halo titles. Microsoft did the same for its just-cancelled Perfect Dark project, with Tomb Raider developer Crystal Dynamics helping development.
“Xbox in general feels years behind the curve in game development, and it leads to a lot of wasted time and effort,” the developer explained. Additionally, the developer explained that Microsoft is “trying their damnedest to replace as many jobs as they can with AI agents”, a fact that has spread into other aspects of the company.
Microsoft’s layoffs over the past few years have negatively affected Halo in a number of different ways. Infinite’s post-launch development was squandered for both multiplayer and in-development single-player add-ons, cross-media plans were delayed, and development on the upcoming Combat Evolved Remake has suffered.
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