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Obsidian Entertainment, the Xbox first-party studio behind The Outer Worlds, Avowed, and Grounded, has reportedly lost around 25% of its staff as Microsoft cuts thousands of jobs across its gaming brand.
These Obsidian-specific layoffs were not mentioned earlier in the day when the bad news first broke. Instead, they're being outed by Kotaku, who say that between 60 and 70 employees have lost their jobs.
Last week, there was word that Obsidian was actually in danger of being shut down — but that specific report was later refuted. It could be that these layoffs were the real story, and the details were just muddied at some point.
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Kotaku says that "many" of the impacted employees were "senior" figures — some with over a decade of experience — at the studio. So this isn't to be confused with, say, the process of downsizing after shipping a product.
Obsidian's future has been up for debate for quite some time. The developer clearly has talent, but it's struggled to deliver any commercial smash hits during its time under the Xbox banner.
2025's The Outer Worlds 2 ended up being the studio's biggest and most expensive project to date, but by almost all accounts, the sci-fi RPG simply didn't catch on, and trails its predecessor's sales by some distance.
Taking all of this into account, it'll be interesting to see what's next for Obsidian. While there's no doubt that it's been one of Xbox's most prolific outfits, it will need to start impressing the company's newly appointed overlords sooner rather than later.
Are you an Obsidian fan? What do you make of these layoffs? Let out yet another sigh in the comments section below.