Obsidian Entertainment, the acclaimed studio behind titles such as The Outer Worlds and Fallout: New Vegas, is reportedly undergoing substantial layoffs. According to a new report from Kotaku, citing individuals familiar with the situation, the studio is losing around a quarter of its staff. This development follows Microsoft's acquisition of Obsidian in 2018 as part of its Xbox Game Studios umbrella.
While the exact number of affected employees has not been officially confirmed, the reported scale suggests a significant impact on the studio's operations. Obsidian is currently working on several high-profile projects, including the upcoming fantasy RPG Avowed and the survival game Grounded. The studio also recently released The Outer Worlds 2.
These layoffs at Obsidian are part of a broader trend of workforce reductions impacting the video game industry and Microsoft's gaming division. In January 2024, Activision Blizzard, which was recently acquired by Microsoft, announced plans to lay off approximately 1,900 employees, constituting about 8 percent of its workforce. Microsoft itself has also implemented layoffs across various divisions, including its gaming sector, impacting studios beyond Obsidian.