Epic Games CEO Tim Sweeney drew attention after backing Microsoft's strategy for restructuring its Xbox gaming division, saying the changes could give major projects a better chance of succeeding. His comments came months after Epic Games carried out its own major workforce reduction.
'Putting the best performing studios in charge of the projects with the most potential makes sense, and gives those projects the best chance of success,' Sweeney wrote on X, commenting on Microsoft's studio strategy.
What the Xbox Restructuring Involves
Microsoft's Xbox division is eliminating 268 roles across Halo Studios, other first-party development teams and Xbox Game Studios' management and central functions. The company also announced a series of changes involving its studios and game franchises.
Activision, the Call of Duty publisher Microsoft acquired in 2023, will develop the next Halo title through a new, purpose-built team. A small team at Halo Studios will continue supporting existing Halo games.
Ninja Theory, the studio behind Hellblade, is facing a proposed closure after two attempts to divest the studio fell through. Microsoft said it would begin consultation with employees while continuing to explore other options.
Obsidian Entertainment, known for Fallout: New Vegas and The Outer Worlds, will move under the Bethesda label. King, Microsoft's mobile gaming division, will absorb Microsoft Casual Games, while Playground Games and Turn 10 Studios will come together as a single studio focused on franchises including Forza and Fable.
Rare and World's Edge will also move under Activision. Compulsion Games, Double Fine and Undead Labs have transitioned out of Xbox and will operate independently, with Microsoft providing funding and other support.
Microsoft had announced plans in July to eliminate approximately 3,200 Xbox roles throughout fiscal 2027, including about 1,600 immediately. The latest cuts, together with studio divestitures since July, put the company roughly three-quarters of the way through that previously announced restructuring.
The changes come amid a broader wave of technology-sector job cuts. More than 128,000 tech jobs had been eliminated globally by 10 September, with more than 6,300 positions cut during the first 10 days of September, according to data from Layoffs.fyi cited by Business Standard.
Oracle, Amazon, Dell, Uber and Microsoft are among major technology employers that have announced workforce reductions in 2026.
Sweeney's Comments Come After Epic's Own Layoffs
Sweeney's comments are notable given Epic Games' own major workforce reduction earlier this year.
In March 2026, Epic Games announced plans to lay off more than 1,000 employees. The company attributed the cuts to a decline in engagement with Fortnite that began in 2025, saying it was spending significantly more than it was making as a result.
'In being the industry's vanguard, we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers,' Sweeney said at the time.
Among those laid off was Mike Prinke, whose wife, Jenni Griffin, publicly said he had terminal brain cancer. Griffin said the layoff caused the family to lose his life insurance coverage.
The case drew attention online, prompting Sweeney to respond. 'Epic is in contact with the family and will solve the insurance for them,' he wrote. Sweeney also said Prinke's medical information was confidential and 'was not a factor in this layoff decision.'
Griffin had separately described her husband as 'not just a number' and as 'a father' and 'a husband' in a public post about the layoff.
Sweeney's comments on Microsoft's restructuring therefore come against the backdrop of Epic's own workforce cuts, although his X post specifically addressed Microsoft's strategy of placing high-potential projects with its strongest-performing studios rather than explicitly endorsing every element of the company's workforce reductions.
Putting the best performing studios in charge of the projects with the most potential makes sense,
— Tim Sweeney (@TimSweeneyEpic) September 22, 2026
and gives those projects the best chance of success.
