Microsoft announced that it would cut more than 5,000 jobs from five studios acquired previously, with about half of the reductions taking effect immediately and the remainder scheduled through the remainder of the year.

The company had previously been rumored to reduce staff after a period of leaks, and state WARN notices filed in several U.S. jurisdictions have now detailed the specific numbers for each studio.

According to the notices, Obsidian Entertainment is reducing its workforce by 52 employees, Zenimax Online Studios by 213, and Zenimax HQ by 166. GameFile reported that the layoffs represent roughly 25 percent of Obsidian's staff. Industry reporter Jason Schreier said the changes mark a strategic shift for Obsidian, leading to the cancellation of a sequel to Avowed in favor of development on a new Fallout title.

Microsoft has not provided a timeline for completing the remaining reductions, and the broader impact on its gaming portfolio remains unclear.