Microsoft's Latest Xbox Layoffs Hit Obsidian — Avowed's Art Director Is Out

Microsoft’s sweeping Xbox layoffs have reached Obsidian Entertainment. The studio confirmed that Matt Hansen, the art director for the upcoming role-playing game Avowed, is out.

Obsidian co-founder Chris Avellone confirmed Hansen’s departure, adding another name to the list of casualties from Microsoft’s ongoing 3,200-person Xbox restructuring. The cuts have already gutted studios across the division, including id Software.

Hansen had been with Obsidian for years and served as the art director on Avowed, one of the studio’s most anticipated titles. But he was just as well known for what he said outside of work.

In late 2024, Hansen began posting publicly about hiring practices in the game industry. He said he prioritized hiring Black artists for open roles and made comments about there being “too many white men” in the industry. Some saw it as a push for much-needed diversity. Others called it discrimination.

He didn’t stop there. Hansen said he wanted Avowed to be as “politically correct” as possible, aiming for broad representation in the game’s design. When Elon Musk took notice of pronoun options in the game, Hansen fired back, calling Musk “the richest, biggest asshole on the planet” and saying he couldn’t think of anyone he’d rather piss off more. He screenshotted the exchange and posted it with the caption “Sickos.jpg.”

Musk didn’t let it slide. He shared Hansen’s posts and tagged Microsoft CEO Satya Nadella, calling the hiring remarks illegal. Avellone himself had previously urged legal action, saying in November 2024 that artists who had been turned down by Obsidian due to racial discrimination should sue.

Hansen’s exit is the latest chapter in a messy saga for Xbox. The 3,200-person layoff wave has been brutal — studios like id Software have been hit hard, and now Obsidian is feeling the squeeze too. Word is that Avowed 2 may have been canceled and that the studio is pivoting to a new Fallout title instead.