Give the man his job back, along with a written apology and a raise. After everything he's done for Halo and for Destiny, he deserves better.
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We haven't even heard Bungie's side of the story. What they did is extremely drastic, and I'm suspecting that there's something more at work here than grudges or the usual malarkey, likely of O'Donell's doing. Just because Bungie had employed him longer than most doesn't make him some kind of god immune to the judgment of his superiors.