Tension at Halo Studios: internal criticism for Phil Spencer’s message after layoffs

Some employees would not have taken well the email from Phil Spencer to employees yesterday afternoon.

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The last few days have been particularly turbulent for Xbox’s internal teams. The major adjustment announced in Microsoft Gaming has led to massive layoffs and project cancellations, and although the management has tried to justify the decision, the internal atmosphere doesn’t seem to be improving.

One of the most evident points of friction arises in Halo Studios — the team previously known as 343 Industries —, where some members have shown their discontent with the message from Phil Spencer sent by email to employees. The CEO spoke of a painful but necessary adjustment, while boasting about record-breaking user numbers in the Xbox ecosystem.

The Halo team doesn’t share the tone of the message

According to Engadget, a Halo Studios worker, who preferred to remain anonymous, described the message as offensive. In their opinion, Spencer shouldn’t highlight the ecosystem’s successes while laying off thousands of people. It’s estimated that the cutbacks have affected thousands of employees at Microsoft Gaming.

• The unrest at Halo Studios is not new. After its restructuring and name change, the team is increasingly relying on external studios for the development of the next Halo, following a similar model to franchises like Call of Duty or Battlefield. Additionally, internal sources point out that Microsoft is pushing the use of generative AI and tools like Copilot for everyday tasks, something that hasn’t been well received by some developers.

Meanwhile, Halo Studios has confirmed that there will be news about the franchise in October, although it’s still unclear whether it will be about the new game, additional content, or some kind of relaunch. In any case, the relationship between Xbox’s top management and its internal studios seems to be at a delicate moment.