Obsidian Entertainment Encountering 25 Percent Workforce Cuts Resulting from Xbox Job Cuts

**Major Job Cuts at Obsidian Entertainment as Xbox Restructures**
In a significant reorganization effort, Xbox has revealed extensive layoffs impacting several departments within the company, including a considerable number of employees at Obsidian Entertainment, the well-regarded studio recognized for titles like *Avowed* and *The Outer Worlds*. Sources suggest that around 60 to 70 staff members, representing about one-quarter of the studio’s personnel, have been affected.
The positions lost span a variety of fields, including producers, artists, designers, programmers, writers, and quality assurance testers, many of whom were in senior roles within the studio. This downsizing is part of Xbox’s larger initiative that involved a reduction of approximately 1,600 jobs throughout the organization.
Cuts specific to Obsidian were carried out mainly on July 6, with some workers informed that their roles would be terminated later in the year as part of ongoing workforce reductions. This sizable talent exit raises worries about the continuity of ongoing projects, as the remaining employees have yet to receive clear direction on how to move forward considering the high number of titles in development.
Nonetheless, development on *Grounded 2*—currently in early access—and the forthcoming DLC for *The Outer Worlds 2* is anticipated to proceed. However, the future plans from the studio seem uncertain, as employees await further details in an all-hands meeting set for July 7.
Obsidian Entertainment boasts a rich legacy, having been founded in 2003 by ex-employees of Black Isle Studios. Over the last twenty years, the studio has built a reputation for crafting beloved games, including *Star Wars: Knights of the Old Republic II*, *Fallout: New Vegas*, and *Pillars of Eternity*. Since joining Microsoft in 2018, Obsidian has launched several significant titles, enhancing Microsoft’s gaming offerings with projects aimed at diverse player interests.
Recent releases from Obsidian, such as the narrative-driven *Pentiment*, which received a Peabody Award and a Game Developers Choice Award for Best Narrative, along with the critically lauded *The Outer Worlds*, showcase the studio’s dedication to quality storytelling and innovative gameplay. However, the current layoffs present a serious obstacle to sustaining progress on future projects.
As the situation develops, the gaming community and industry analysts will be keenly observing the consequences of these layoffs for both Obsidian Entertainment and Xbox’s strategic direction in the competitive gaming market.