Obsidian Entertainment under Bethesda after Xbox reset and 268 layoffs

Bethesda is taking on a broader role and now also falls under its remit, as described by Xbox Wire in the update "Continuing Our Reset."

In the same round, 268 additional roles were cut across first-party studios, central functions, and the XGS management layer.

What happened

Xbox published an update on 22 September 2026 outlining the next phase of Microsoft’s internal reset. In that update, Bethesda’s responsibilities are expanded and Obsidian Entertainment now falls under its remit. The official Xbox Wire post says Bethesda is broadening its remit to include Obsidian, while Obsidian continues its current projects.

This does not mean Obsidian has been acquired, but it does place the studio more directly under Bethesda organizationally. In the available sources, the move is described as an expansion of Bethesda’s remit within Microsoft Gaming. The same update also says Obsidian will keep working on Grounded and on a new Fallout project being developed together with Bethesda Game Studios.

At the same time, multiple publications report that Xbox is cutting another 268 jobs. Those layoffs are said to affect first-party studios, central functions, and the XGS management layer. PC Gamer describes the round as 268 additional employees spread across Halo Studios, other first-party studios, and the XGS management and central functions layer. That makes clear the reorganization is not limited to Bethesda and Obsidian, but runs more broadly through the company.

The Xbox Wire update and secondary reporting place this move within the same reset Microsoft and Xbox had already begun earlier. Reporting also references a comment from Matt Booty, who is said to have described the move as roughly three-quarters of the originally announced restructuring. That wording appears in coverage, but the exact memo text is not fully visible in the available sources.

Background

The restructuring is part of the broader reset Microsoft and Xbox have already been carrying out within their gaming division. In the available information, Bethesda is described as taking on a larger coordinating role, while the Xbox Wire post also shows that the remit of other parts is being adjusted. In the same update, for example, King is said to be expanding its remit to Microsoft Casual Games, indicating the reorganization affects multiple parts of Microsoft Gaming.

For Obsidian, the key point is that the studio is explicitly named in the update as part of Bethesda’s expanded remit. The sources give no indication that this is a sale or acquisition of Obsidian. The wording in the official update points to an organizational reshuffle within Microsoft Gaming, not a change in ownership.

The 268-role layoff round is tied in reporting to the same restructuring. The available sources mention several parts of the organization, including first-party studios and central functions. Because the underlying memo was not fully provided, the exact wording of the layoff round remains dependent on secondary reporting. What is clear is that the 268 roles are part of the same reset that was reiterated on 22 September 2026.

The combination of Bethesda’s expanded remit, the mention of Obsidian, and the additional layoffs makes this one of the clearest shifts within Microsoft Gaming in 2026. The official Xbox Wire post also explicitly says Obsidian will continue its current projects, including Grounded and the new Fallout project with Bethesda Game Studios.

Related GAME-scanner articles

• Obsidian is working on a new Fallout project while Bethesda prepares remasters and Fallout 5
• Xbox confirms 268 additional layoffs during broader Microsoft Gaming restructuring

Sources

• Xbox Wire, 22 September 2026: "Continuing Our Reset"
• GameRant: reporting on Bethesda, Obsidian, and the Xbox restructuring
• PC Gamer: reporting on 268 additional layoffs and the reorganization within Xbox