We at NerdLeaks are following a troubling rumour about Obsidian that, if true, would represent a major shake-up for one of the industry's most celebrated RPG studios. According to Eurogamer, which cites a Kotaku report, Obsidian is losing about a quarter of its workers as part of Microsoft’s broader restructuring within Xbox.
What Was Reported
Per Eurogamer, which in turn references Kotaku, the cuts at Obsidian amount to somewhere between 60-70 roles. Those losses reportedly span multiple disciplines, with affected positions including:
- artists
- designers
- writers
- producers
- programmers
- QA testers
The report claims some of the people impacted have been at Obsidian for over a decade. It also names senior departures among the cuts, notably an art director from The Outer Worlds team and, bizarrely, “the studio’s only recruiter,” according to the coverage.
Eurogamer notes that Obsidian was not specifically named in Monday’s wider Xbox layoffs, which impacted 3,200 jobs across Xbox. Only half of those 3,200 were let go immediately — 1,600 — with the remainder said to be phased over the coming year. The same pattern ostensibly applies to Obsidian: most of the 60–70 roles were lost in the first wave, with the rest reportedly planned for later this year.
On projects, the report says work on Grounded 2 will continue and that Obsidian will deliver more The Outer Worlds 2 DLC, but “nothing beyond that is certain,” per the coverage. The studio is also said to be hosting an all-hands meeting today to clarify next steps for remaining staff.
The Source & Credibility
We’re flagging everything here as rumour territory — take this with a pinch of salt. Eurogamer is the outlet reporting these specifics publicly and points to a Kotaku piece that cites “sources familiar with the matter.” That chain of reporting is spelled out in the coverage and provides the basis for the claims.
There are a few concrete-sounding elements in the report: the overall Xbox figure of 3,200 jobs affected, the 1,600 immediate layoffs and the remainder phased over a year, and the 60–70 roles tied specifically to Obsidian. But as with any second-hand scoop, the provenance is relevant — Eurogamer relays Kotaku’s information rather than originating direct studio confirmation in the piece.
The report also quotes affected staff reaction: writer and narrative designer Jay Turner, whose credits include Avowed, Dragon Age: Origins and Mass Effect 2, reportedly described the cuts as “Microsoft sacrificial rituals” on BlueSky. That public reaction lends anecdotal colour, but it is still not the same as formal confirmation from Obsidian or Microsoft.
What It Could Mean
If the reported numbers are accurate, Obsidian losing about a quarter of its workforce is likely to reshape how the studio allocates resources. The coverage suggests the immediate practical effects include continued work on Grounded 2 and additional DLC for The Outer Worlds 2, but explicitly says “nothing beyond that is certain.”
With senior talent among those reportedly affected, the studio’s leadership and creative bandwidth may be altered in ways that will take time to fully understand. The presence of long-serving employees in the cuts — people with over a decade at the studio, per the report — raises questions about institutional knowledge and continuity on ongoing and longer-term projects.
We’re also mindful that not all planned layoffs take effect immediately; the phased nature described by Eurogamer means the situation could continue to develop over months rather than being resolved in a single moment.
Why This Matters
This matters because Obsidian is a high-profile developer known for titles such as The Outer Worlds, Fallout: New Vegas, Avowed and Pentiment. According to Eurogamer, Obsidian was acquired by Microsoft in 2018 and has since been an active studio, shipping multiple titles. A loss on the order of a quarter of its staff would have ripple effects for the people involved, the studio’s culture, and potentially the trajectory of its future releases — though the report stresses that certain projects will continue.
For now, the claims sit in the realm of reported rumour: we’ll be watching for official statements from Obsidian or Microsoft and any follow-up reporting that can corroborate or contradict these details. Until then, take this with a pinch of salt — it’s a significant-sounding development, but it’s one that still needs direct confirmation.
