Halo Studios Also Has Layoffs – While Insiders Claim No One Is Confident About Their Next Project

Halo Studios has also become part of this month’s round of layoffs.

As reported by Engadget, they can confirm at least five employees who have been laid off, and the current headcount is somewhere between 200 to 300 employees. In an internal memo shared to employees, Microsoft Gaming CEO Phil Spencer gave this rationale:

To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness.

Engadget reached out to some of these former employees, who paint a poor picture of the studio. Halo Studios seemed to be confident when they announced they would reveal their next project in this year’s Halo World Championships. However, those employees told Engadget that the situation in the studio is actually frantic. One employee said:

I don’t think anybody is really happy about the quality of the product right now. There’s been a lot of tension and pep talks trying to rally folks to ship.

Said employee also claims that this particular current project is “in crisis.” Engadget also got an employee claiming that Microsoft is pushing AI onto their developers, saying:

They’re trying their damndest to replace as many jobs as they can with AI agents.

For now, Microsoft has not made clear to what extent their adoption of AI model technology, as embodied by CoPilot, has affected jobs in the company, and that includes their gaming division. Compulsion Games head Guillaume Provost stated in an interview last May that Microsoft is not mandating their game studios to use AI tools.

The biggest claim from Engadget’s report comes from one developer, who claims that Halo Studios has shifted their game development towards more contractual studios. All of this seems to bode poorly for Halo Studios and the Halo game they are about to reveal, but we cannot disregard the possibility bias plays in these leaks and reports. It is still possible that this Halo project Halo Studios is about to reveal this October turns out to be impressive, in spite of all these claims. We do have to weigh to what degree we should believe such claims, but this is one of those things that may become clearer in hindsight.

We do wish the best for the people about to leave Halo Studios, and hope they can find placement back in the video game industry.