Obsidian Entertainment has been caught in Microsoft's latest wave of Xbox layoffs, ending a streak in which the studio had avoided previous rounds of cuts. Staff reductions hit multiple disciplines including art, design, engineering, and writing, with affected employees publicly announcing their departures across social media platforms.

The layoffs affected both career-long employees and recent hires. Among those laid off was Daniel Alpert, who spent two decades at the studio contributing to titles such as Neverwinter Nights 2 and Fallout: New Vegas, alongside engineer Wenzheng Huang, who had joined the company just two months earlier. Other departures included narrative designers and producers who had worked on projects including Avowed and contributed to earlier BioWare releases.