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Gamexplore > My Bookmarks > News > The Outer Worlds 2, Avowed Studio Hit by Layoffs, Affecting 25 Percent of Employees – Rumor
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The Outer Worlds 2, Avowed Studio Hit by Layoffs, Affecting 25 Percent of Employees – Rumor

July 8, 2026 2 Min Read
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Obsidian Entertainment isn’t on the chopping block as some reports noted leading up to Xbox’s mass layoffs, but that doesn’t mean it escaped unscathed. Official figures aren’t available, but sources speaking to Kotaku said that 60 to 70 employees, about 25 percent of the studio, are gone.

These reportedly include The Outer Worlds art director Daniel Alpert, the studio’s recruiter, and other experienced developers, from producers and designers to QA testers, writers and programmers. A studio meeting is reportedly scheduled for today, but the studio continues to work on Grounded 2 and story DLC for The Outer Worlds 2 (which has yet to be formally revealed).

While Obsidian has had a strong run with Xbox, becoming one of its most productive studios (especially last year), its biggest games haven’t been the success that the publisher wanted. The Outer Worlds 2 and Avowed weren’t best-sellers – their six-plus years of development time didn’t help matters either – but studio Feargus Urquhart clarified that they’re not “disasters” either.

With Grounded becoming one of the most successful properties to emerge from the studio since its acquisition by Xbox, it wouldn’t be surprising if it received most of the focus going forward. Of course, Avowed 2 is also allegedly in the works, so perhaps we’ll learn more about the fate of that in the coming days.


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