Xbox layoffs cut about 25% of Obsidian Entertainment workforce, reports say

The Outer Worlds 2 game director and 20-year Obsidian Entertainment veteran Brandon Adler has reacted to Microsoft's recent mass layoffs at Xbox and other notable changes, which included the reported cancellation of Avowed 2. Adler, who is the current game director on an unannounced project at Obsidian, said it was an "extremely difficult week at Obsidian" after the layoffs were announced on July 6. "Not only have I had to say goodbye to some amazing game developers, but I've had to say goodbye to some of my best friends. I truly feel for every one of them. Know that if you are looking to hire one of these former Obsidian devs, you are hiring some of the best people around--both professionally and personally," he said. Something that made recent days more challenging, Adler said, was how "a bunch of cold take artists" commented on "what Obsidian is what it isn't," he said. Specifically, Adler said he takes issue with people commenting on how Obsidian "isn't who they used to be" or that the company's DNA has changed."Most of the time they are not just wrong, but spreading an enormous amount of misinformation," he said. "In most circumstances, the people in lead or director roles are the same people that worked on games like The Outer Worlds, Pillars of Eternity, and New Vegas. Like, literally the same people. The through line from KotOR2 to our current games is pretty clear." Obsidian is "of course not" the same as it was 20 years ago, Adler admitted, and that's because in life, "nothing stays the same." However, Adler maintains that "the DNA at Obsidian is the same was it always was." The same studio DNA that led to popular and well-received games like Knights of the Old Republic, Fallout: New Vegas, Neverwinter Nights 2, and South Park: The Stick of Truth remains intact, he said. "I'm extremely proud of our history and I am also excited for who we have become," he said. "Just remember, when you are seeing people spouting off about Obsidian, running their mouths about who we are now vs. what we were then, you are listening to someone crow about something with zero insight into how a game is made and who contributed to our previous games." Adler started at Obsidian in January 2006 after spending four years in the United States Air Force where he served in Operation Iraqi Freedom and Operation Enduring Freedom as a senior airman. His first gig at Obsidian was a QA tester for Neverwinter Nights 2. He then became an associate producer on Alpha Protocol and later on New Vegas and The Stick of Truth. He left Obsidian in March 2012 to join MEDL Mobile, where he worked on mobile games and apps. He returned to Obsidian in June 2013 to become lead producer on Pillars of Eternity. He was the gameplay design director on Avowed and then became game director on The Outer Worlds 2 with Leonard Boyarsky. The layoffs at Obsidian reportedly went deep, with 25% of staff losing their jobs. A planned Avowed sequel was said to have been canceled, with Obsidian shifting focus instead to a new Fallout game from New Vegas director Josh Sawyer.

Microsoft's mass layoffs had a heavy impact on the Xbox division, and Obsidian Entertainment, the studio behind The Outer Worlds, is one of many Xbox-owned studios where cuts were deep. Kotaku reports that between 60 and 70 people--roughly a quarter of the studio's workforce--have been let go. The talent laid off includes producers, QA testers, artists, and many others spanning different disciplines. Senior talent was not spared in the cuts, with Kotaku saying that some laid off were with the studio for over a decade. Others affected include the art director for The Outer Worlds and the studio's lone recruiter. Despite the cuts, it is said that work will commence on Grounded 2 and planned DLC for The Outer Worlds 2, but any plans beyond that are currently unknown. Obsidian has a storied history: Founded in 2003, the Irvine, California-based studio became known for Star Wars: Knights of the Old Republic 2, Fallout: New Vegas, and South Park: The Stick of Truth. Microsoft bought the studio in 2018 as part of an acquisition spree, and the studio has since shipped games including Grounded, Pentiment, and Avowed. 2025 was massive for Obsidian, as it released Avowed, The Outer Wilds 2, and Grounded 2 (in early access) all in the same year--but Obsidian studio design director Josh Sawyer said earlier this year that the triple release was due to poor planning and resource mismanagement, or in Sawyer's words, "the result of things going wrong." It's said that Obsidian will continue making games set in the Avowed universe, but a third entry in The Outer Worlds series is not on the docket. Meanwhile, Xbox layoffs also hit Id Software, Bethesda Game Studios, and ZeniMax as a whole. These cuts are part of Xbox's initial wave of 1,600 layoffs, with about 3,200 total layoffs expected throughout Microsoft's fiscal year. Microsoft is cutting about 4,800 positions across the entire company--roughly 2% of its entire workforce.

Obsidian Entertainment lost 25% of its staff due to the Xbox layoffs despite reportedly having several projects in the pipeline.

RPG studio impacted.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.Read the full article on pushsquare.com

Roles impacted spanned all disciplines, and included employees with over a decade of experience at the studio