Significant Layoffs Hit Obsidian Entertainment Amid Xbox Cuts

In a sweeping round of layoffs at Xbox, reports from Kotaku indicate that approximately 25% of Obsidian Entertainment's workforce has been affected. The layoffs, which reportedly impacted between 60 and 70 employees, span a variety of roles including producers, artists, designers, programmers and QA testers, all of whom have contributed to Obsidian’s extensive catalog of recent titles.

LinkedIn posts from those impacted suggest that many of the affected employees were senior-level staff, with some boasting over a decade of experience at the studio. Notable departures included the art director for The Outer Worlds and the only recruiter at the studio. The bulk of these layoffs occurred on July 6, coinciding with Xbox's announcement of 1,600 job cuts, while additional layoffs are expected to take place later this year as part of a second wave.

Sources familiar with the situation have expressed concerns regarding the remaining staff's ability to manage ongoing projects in light of the significant reductions in workforce. Employees described a "huge list of projects" that Obsidian has slated for the coming months, raising questions about the future of these developments. While work on Grounded 2, which is currently in early access, and the planned DLC for The Outer Worlds 2 is anticipated to proceed, uncertainty looms over projects beyond these titles. A studio-wide meeting is expected to provide further clarity on July 7.

Microsoft has chosen not to comment on the specifics of the layoffs. Founded in June 2003 by former Black Isle staff including Feargus Urquhart and Chris Avellone, Obsidian Entertainment has garnered a reputation for delivering diverse and engaging gaming experiences. Over the years, the studio has released beloved titles such as Star Wars: Knights of the Old Republic II: The Sith Lords, Fallout: New Vegas, and Pillars of Eternity, along with its sequel.

Following its acquisition by Microsoft in 2018, the studio has launched a series of successful games including The Outer Worlds (which received multiple awards) and Pentiment, which won a Peabody Award and the Game Developers Choice award for best narrative in 2022. As the gaming community watches closely, the future of Obsidian's projects and the studio’s direction remains a topic of significant interest.