The games you love don't make themselves, and the people behind them aren't immune to corporate cost-cutting. Obsidian Entertainment, the studio responsible for Fallout: New Vegas, Pentiment, Grounded, and most recently Avowed, has been hit by Xbox's mass layoffs, with estimates putting the total headcount reduction at 60-70 employees. That's roughly a quarter of the studio's 285-person workforce from 2025.
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A studio that earned its place, punished anyway
For most of the current Xbox layoff wave, Obsidian had appeared untouched. The studio had delivered five games across five years, from 2020 to 2025, a pace that almost no comparably sized studio in the modern industry can match. Grounded, Pentiment, The Outer Worlds 2, and Avowed all shipped. The mandate from Xbox, to feed Game Pass with a steady stream of quality titles, was followed to the letter.
That didn't protect anyone.
The names surfacing from social media posts paint a clear picture of how indiscriminate the cuts were. Daniel Alpert, an artist with 21 years at Obsidian, was among those laid off. His credits span Neverwinter Nights 2, the Fallout: New Vegas DLC expansions, Alpha Protocol, and The Outer Worlds 2. Two decades of institutional knowledge, gone. On the other end of the timeline, engineer Wenzheng Huang had joined the studio in May, just 2 months before the axe fell.
Who was affected
Beyond Alpert and Huang, the list of confirmed departures includes:
- Jay Turner, writer whose Obsidian work was on Avowed, but whose broader career includes Jade Empire, Dragon Age: Origins, and Mass Effect 2
- Geoffrey Fogle, communications producer
- Tyler McCombs, area designer
- Soojin Paek, artist on Pentiment
- A.K. Fedeau and Katie Tenney, both narrative designers on Avowed
- Bre Seale, area designer on Avowed
That's a significant concentration of talent from Avowed specifically, the studio's most recent release. Obsidian narrative lead Kate Dollarhyde, who remains at the company, described the layoffs as significant in scope.
Five games in five years, and this is the result
Here's the thing: Obsidian did everything right by the metrics Xbox supposedly cared about. The studio kept games shipping. Pentiment was a critical darling. Grounded found a real audience. Avowed, despite a mixed initial reception, has earned genuine appreciation from RPG fans looking for something with actual depth. For a beginner's guide to Clair Obscur: Expedition 33 level of polish and care, Obsidian consistently delivered worlds worth getting lost in.
The broader Xbox layoff picture makes the Obsidian situation even harder to process. Microsoft announced the elimination of 3,200 positions across its gaming division, with a further 1,600 expected over the following 12 months. Bethesda and ZeniMax were also hit hard. The scale isn't a restructuring, it's a reset.
What most players miss in these announcements is the compounding effect on games already in development. Losing area designers, narrative writers, and senior artists mid-production doesn't just slow things down. It changes what a game can be. Institutional knowledge about a project's systems, its tone, its history of decisions, walks out the door with each person.
What this means for Obsidian's future projects
Obsidian has The Outer Worlds 2 in active development. The studio built its reputation across 25 years on games that required careful, character-driven design work, exactly the kind of work that takes years to master and can't be replaced by a new hire in an onboarding week.
The cuts arrive at a moment when Xbox's broader strategy feels genuinely unclear. The push toward Game Pass volume appears to be giving way to something else, though what that looks like for the studios still standing isn't obvious. For fans of Obsidian's particular style of RPG, the next few years will be telling.
Keep up with all the latest developments across the industry, from studio news to game releases, in our gaming guides hub, and check out the ARC Raiders Close Scrutiny guide if you're looking for something to play while the dust settles.
