Microsoft's latest restructuring at Xbox has sliced roughly a quarter of Obsidian Entertainment's workforce, with 60-70 roles eliminated across artists, designers, writers, programmers, producers, and QA testers. The cuts, part of a broader 3,200-job reduction announced earlier this week, struck the studio behind The Outer Worlds, Grounded, and Avowed immediately after Xbox signaled a sharper focus on proven franchises. Senior talent including The Outer Worlds art director departed, along with the studio's sole recruiter, leaving an all-hands meeting scheduled to address what remains.
Work on Grounded 2 continues while additional The Outer Worlds 2 DLC is still slated, but projects beyond those sit in limbo amid the uncertainty. Veteran staff with over a decade at the studio, including writer and narrative designer Jay Turner, described the moves as "Microsoft sacrificial rituals." The timing aligns with earlier reports of commercial underperformance on recent RPG releases, though Xbox has confirmed the studio itself is not closing.
Half of the total Xbox cuts roll out today with the remainder staggered through fiscal 2027, meaning additional Obsidian impacts could surface later this year. Sources close to the matter note that multi-discipline losses hit both The Outer Worlds and Grounded teams specifically.
