Obsidian Entertainment Lost More Than 50 Employees Due to Latest Layoffs at Xbox

On June 6th, Microsoft officially revealed changes it made within its Xbox gaming division as part of its restructuring process. As a result, more than 4,500 employees from various gaming studios were laid off, along with staff in areas such as Game Pass, xCloud, and more. However, Obsidian Entertainment, the studio behind the Outer Worlds and Grounded franchises, was not mentioned in the initial reports. A new report now reveals that the California-based studio was affected as well.

As revealed by Kotaku, amid Microsoft's ongoing restructuring, Obsidian Entertainment has lost about 25% of its staff. While the exact number of layoffs has not been disclosed, gaming media report that approximately 50 to 60 employees across nearly all departments—design, software, QA, writing, etc.—were affected. This includes both recently hired personnel and high-profile specialists, among them The Outer Worlds art director Daniel Alpert. However, only his position was confirmed, not his name.

Given the circumstances, it is expected that the situation inside the studio may affect its future projects. Bloomberg's Jason Schreier previously denied that Obsidian Entertainment was working on a new Fallout game; however, the studio's former creative director, Chris Avellone, stated that they are instead working on Avowed 2. Furthermore, on his X page, he expressed confidence that the game has not been canceled as a result of the recent layoffs, as you can check out below:

Also, I'm betting Avowed 2 wasn't canceled, it's too far along.

As we already know, despite significant layoffs affecting several major studios, such as Bethesda Game Studios, id Software, Ninja Theory, Arkane Studios, and more, Microsoft has decided not to shut down any of its gaming divisions. This means these studios will continue working on their upcoming projects. You can also check out everything we know so far about Microsoft's layoffs at Xbox amid its ongoing restructuring process.