Xbox Layoffs: Avowed 2 Cancelled as Focus Shifts to New Fallout Game
Thousands Displaced in Xbox Division Overhaul
Microsoft has initiated a significant restructuring of its gaming division, resulting in thousands of layoffs across Xbox, id Software, and other internal studios. The workforce reductions are part of a broader consolidation effort that has led to the cancellation of select projects, including the reported shelving of an Avowed sequel, as the company pivots resources toward future Fallout development.
Deep Cuts Hit id Software and Xbox
Microsoft’s latest round of job cuts has affected more than 3,000 employees within the Xbox division.
Obsidian Reallocates Resources to Fallout
Internal shifts at Obsidian Entertainment suggest that development priorities have been reallocated. Industry insiders report that while a sequel to the role-playing game Avowed has been canceled, the studio has shifted its focus to a new Fallout project.

Efficiency Drive Follows Aggressive Expansion
The current restructuring is framed by the company as a response to an unstable business environment.