Xbox is reportedly preparing a second major round of layoffs this week, with Blizzard and Halo Studios among the studios potentially in the crosshairs. According to The Information, which cited a source briefed on the plans, Xbox plans to cut hundreds of jobs and consolidate several of its game studios. The report does not name specific studios or a final headcount, but insiders believe the consolidation could touch Xbox's publishing arms, including Xbox Game Studios, Bethesda, Activision, and Blizzard.

Blizzard's situation is especially notable. The studio was reportedly spared during Xbox's first wave of cuts in July, when CEO Asha Sharma eliminated 1,600 roles as part of a planned 3,200 reductions through fiscal 2027. That first round instead hit studios like ZeniMax Online and id Software. Bloomberg's Jason Schreier has since said Blizzard layoffs are coming and imminent, despite the studio reportedly being Xbox's most profitable branch right now, and just weeks after a strong BlizzCon that revealed Diablo V and World of Warcraft Forever.

Halo Studios is also apparently on the list, coming off Halo: Campaign Evolved, which launched in July to a mixed reception. Post-launch periods tend to be when studios between projects are most exposed, which lines up with how these things have played out at other developers before. None of this is officially confirmed by Microsoft yet, and it's unclear whether the company's earlier promise not to cancel any publicly announced first-party projects still applies to this round.