The Outer Worlds and Fallout New Vegas studio Obsidian is reportedly losing a quarter of its staff in Xbox layoffs

Obsidian Entertainment, the renowned developer behind The Outer Worlds and Fallout: New Vegas, has been significantly impacted by Microsoft’s major Xbox division restructuring. Approximately 60-70 employees—roughly a quarter of the studio’s workforce—have been laid off, according to reports from Kotaku.

The cuts were part of a broader Xbox restructure announced on July 6th, which saw immediate layoffs of 1,600 employees and plans for another 1,600 job cuts over the current financial year. While Obsidian was not directly named in the initial announcement, the studio was among several Microsoft-owned studios that experienced substantial workforce reductions.

The layoffs affected employees across multiple disciplines, including artists, designers, writers, producers, programmers, and QA testers. Notably, senior talent was not spared—some of those affected had been with Obsidian for over a decade, including the art director for The Outer Worlds.

Staff at the studio are reportedly concerned about the studio’s ability to continue its substantial project pipeline. Obsidian is known for developing acclaimed titles including Avowed, Grounded, and Pentiment, in addition to its more famous work on Fallout: New Vegas.

The restructure was accompanied by Microsoft’s stated push to focus resources on the company’s most lucrative series, including Fallout. The broader Xbox restructuring also involved four studios departing Xbox to new management and one studio entering consultation regarding its future.

The Outer Worlds and Fallout New Vegas studio Obsidian is reportedly losing a quarter of its staff in Xbox layoffs

Sources