Multiple outlets report that Obsidian Entertainment is being hit by workforce reductions connected to wider Xbox/Microsoft layoffs announced on July 6. Rock Paper Shotgun and Eurogamer both cite a report by Kotaku, which says sources familiar with the matter indicate Obsidian is losing roughly a quarter of its staff. The wider context is that Xbox undertakes mass layoffs alongside decisions to end partnerships with several studios. Both summaries describe the cuts as part of a broader effort to refocus resources on Xbox’s major franchises and “lucrative” series. In this context, Obsidian—known for RPGs including The Outer Worlds and Fallout: New Vegas—is among the studios affected by the reported staffing reductions. Rock Paper Shotgun notes that the restructuring includes implications for studios remaining within Microsoft’s portfolio, while Eurogamer focuses specifically on the reported scale of Obsidian’s job cuts. The reporting does not provide further details on which roles are affected or whether additional studios are seeing similar changes, but the shared accounts describe an estimated 25% reduction at Obsidian tied to the Xbox-wide layoffs.