Obsidian Reportedly Loses 25% of Its Workforce as Xbox Restructuring Continues

Obsidian Entertainment has reportedly been hit by another wave of layoffs as part of Microsoft's ongoing restructuring of its Xbox gaming division. According to multiple reports, the studio behind Avowed, The Outer Worlds 2, and Grounded has lost around 60 to 70 employees, representing roughly 25% of its workforce. The affected positions are said to include artists, designers, programmers, writers, producers, and QA specialists.

While Microsoft has not commented on the exact number of layoffs at Obsidian, the reported cuts have raised concerns about the studio's ability to maintain several projects simultaneously. Sources claim that a significant number of experienced developers were among those affected, potentially forcing the company to re-evaluate development priorities. However, there has been no official confirmation that any announced games have been delayed or canceled.

The layoffs come during a broader restructuring across Xbox Game Studios, which has already impacted multiple teams and led to project cancellations elsewhere within Microsoft's gaming business. Earlier rumors suggesting that Obsidian itself could be shut down were later disputed, but the latest reports indicate that the studio has still experienced one of the largest workforce reductions in its history.

For now, Obsidian remains focused on its existing lineup, including continued support for Grounded and the development of future RPG projects. Until Microsoft or the studio provides additional details, the long-term impact of the layoffs on upcoming releases remains uncertain, though the reports suggest the restructuring could affect the pace of future development.