This news is not unexpected.
What happened to Halo Infinite was such a major royal **** up, that I predicted someone was bound to get fired over it.
The big question is how will this affect the development going forward and if this will cause further delays?
I really don't think MS can afford to delay this further than it already has. Especially when MS hasn't exactly laid out any kind of roadmap for major releases next year. Other than Halo Infinite, which was supposed to release 2 weeks from now.
Contrast that to Sony, which has quite a few games already lined up for next year for PS5 (Ratchet, Kena, Guilty Gear, Gran Turismo, Returnal, Horizon 2, God of War 2). Granted, some of those, like GOW 2, may get delayed to 2022. And some of those, like Gran Turismo or Returnal, haven't exactly been confirmed for next year but seem highly likely. But stuff like Kena, Ratchet, and Guilty Gear have been confirmed for early 2021 at least.
And that alone is more than you can say about the 2021 lineup for Series X/S. Which right now is practically unknown other than Halo. Which was supposed to be the one big game for this year. Until it wasn't. So now that's the one big game for next year.
No question the Halo delay left a huge gaping hole in the Series X launch strategy, so I'm not surprised whoever was in charge over there got fired. I know I wouldn't be too happy with that team if I were Phil Spencer.