Microsoft is laying off 450 workers companywide, including about 300 in Washington, as part of ongoing efforts to reset its gaming division.

The Redmond-based tech giant told employees Tuesday that it was cutting roles that would mostly fall under the Xbox banner. Across the company, 268 gaming employees were let go.

The move comes two months after the company laid off 4,800 gaming and sales team employees companywide, including 605 in Washington.

Microsoft's gaming division is in the middle of a hard reset. In February, Xbox CEO Asha Sharma took over from 38-year Microsoft veteran Phil Spencer, who retired. After 100 days on the job, Sharma sent a memo to gaming employees that said after working to revive Xbox, Sharma would devote the ensuing 100 days to a major overhaul of the beleaguered gaming division.

“Our business today is not healthy,” Sharma wrote in July.

The two layoff rounds are part of Sharma's plan to turn around Microsoft's gaming division, known since April as simply Xbox.

Xbox Chief Content Officer Matt Booty announced Tuesday’s layoffs in a note to Xbox employees globally, laying out how the company will consolidate its portfolio of studios and developers that has grown expansively through acquisitions over the past decade.

As part of Xbox’s restructuring, the company will bring future development of the popular franchise “Halo” under the Activision umbrella. Activision is a video game publisher and a subsidiary of Activision Blizzard, which Microsoft acquired in 2023 for almost $69 billion in 2023.

The layoffs hit Halo Studios, the team responsible for “Halo” development since 2011. A smaller version of the team in Microsoft’s Redmond headquarters will support existing “Halo” games.

Other Microsoft-owned developers like Bethesda, responsible for video game franchises like “The Elder Scrolls” and “Fallout,” will bring Microsoft-owned studios under their umbrella as well, consolidating the portfolio of studios and developers.

Booty also gave an update on five studios that were previously planned to be spun off. Two of the studios, Compulsion and Double Fine, became independent in August. Another, Undead Labs, found a new publisher and the future of a fourth, Arkane, is still unclear.

One studio, Ninja Theory, faces closure. Booty said two separate agreements for the studio fell through and now Microsoft is working on a proposed shutdown “while continuing to explore other paths forward.”

“Today, our focus should be on supporting those affected and treating one another with care and respect,” Booty wrote. “I will spend time with our studios over the next week.”

Microsoft has been trying to keep a ceiling on its head count for more than a year as it grapples with the rising costs of an ongoing artificial intelligence-related development and a workforce that swelled during the COVID-19 pandemic. Last year, the company laid off 15,000 employees, 3,202 of whom were based in Washington, according to state data.

Microsoft's global workforce shrunk from 228,000 to 223,000 employees last year, the first overall drop in a decade. The company chalked that decline up to layoffs and the voluntary retirement program it offered to about 8,750 employees in June, with about 30% of eligible employees taking the offer.

The company said in July that it has been trying to “redeploy” employees affected by layoffs, placing them in new roles. Microsoft President Brad Smith said at the time that effort had been effective, as the company’s head count in Washington state has stayed stable at 52,000 employees, despite laying off 3,200 Redmond-based workers last year.

Out of the 4,800 employees laid off globally in July, about 400 affected employees found new roles internally, according to Microsoft.

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