diff --git a/.github/actions/setup-test-env/action.yml b/.github/actions/setup-test-env/action.yml
index 7c3b3097008e..cffa555a49e8 100644
--- a/.github/actions/setup-test-env/action.yml
+++ b/.github/actions/setup-test-env/action.yml
@@ -7,6 +7,10 @@ inputs:
   aws-region:
     description: "The AWS region for S3"
     required: true
+  workers:
+    description: "Number of Playwright workers (used to size per-worker Xvfb displays)"
+    required: false
+    default: "1"
 
 runs:
   using: "composite"
@@ -25,3 +29,5 @@ runs:
 
     - name: Setup Xvfb
       uses: ./.github/actions/setup-xvfb
+      with:
+        workers: ${{ inputs.workers }}
diff --git a/.github/actions/setup-xvfb/action.yml b/.github/actions/setup-xvfb/action.yml
index 859cf9371075..568aae15e4e6 100644
--- a/.github/actions/setup-xvfb/action.yml
+++ b/.github/actions/setup-xvfb/action.yml
@@ -1,27 +1,51 @@
 name: "Setup Xvfb"
-description: "Configure and start Xvfb virtual framebuffer"
+description: "Configure and start Xvfb virtual framebuffer, one display per Playwright worker"
+
+inputs:
+  workers:
+    description: "Number of Xvfb displays to start (one per Playwright worker)"
+    required: false
+    default: "1"
 
 runs:
   using: "composite"
   steps:
     - name: Setup Xvfb
       shell: bash
+      env:
+        WORKERS: ${{ inputs.workers }}
       run: |
-        # Start Xvfb in the background
-        /usr/bin/Xvfb :10 -ac -screen 0 2560x1440x24 > /tmp/Xvfb.out 2>&1 &
+        # Fail fast on invalid input - otherwise `seq 0 -1` silently starts zero
+        # Xvfb instances and the ready-check reports success with no displays.
+        [[ "$WORKERS" =~ ^[1-9][0-9]*$ ]] || { echo "WORKERS must be a positive integer, got: '$WORKERS'"; exit 1; }
+
+        # Start one Xvfb instance per worker starting at :10, so Playwright workers
+        # don't race on a shared X server. test/e2e/infra/electron.ts maps each
+        # worker's parallelIndex to DISPLAY=:(10+parallelIndex).
+        for i in $(seq 0 $((WORKERS - 1))); do
+          display=":$((10 + i))"
+          /usr/bin/Xvfb "$display" -ac -screen 0 2560x1440x24 > "/tmp/Xvfb.$i.out" 2>&1 &
+        done
 
-        # Wait until Xvfb is ready
+        # Wait until every display is ready (default DISPLAY=:10 used by non-Playwright steps).
         export DISPLAY=:10
-        for i in {1..10}; do
-          if xdpyinfo > /dev/null 2>&1; then
-            echo "Xvfb is ready"
+        for attempt in {1..15}; do
+          ready=true
+          for i in $(seq 0 $((WORKERS - 1))); do
+            if ! DISPLAY=":$((10 + i))" xdpyinfo > /dev/null 2>&1; then
+              ready=false
+              break
+            fi
+          done
+          if [ "$ready" = true ]; then
+            echo "All $WORKERS Xvfb display(s) ready"
             break
           fi
-          echo "Waiting for Xvfb to start..."
+          echo "Waiting for Xvfb displays to start..."
           sleep 1
         done
 
-        # Export the DISPLAY variable for subsequent steps
+        # Export the default DISPLAY for any subsequent step that doesn't go through Playwright.
         echo "DISPLAY=:10" >> $GITHUB_ENV
 
         # Start a proper dbus session bus for Electron/Chromium
diff --git a/.github/workflows/test-e2e-ubuntu-run.yml b/.github/workflows/test-e2e-ubuntu-run.yml
index 1a790fc3e1fe..22092d3c2146 100644
--- a/.github/workflows/test-e2e-ubuntu-run.yml
+++ b/.github/workflows/test-e2e-ubuntu-run.yml
@@ -241,6 +241,7 @@ jobs:
         with:
           aws-role-to-assume: ${{ secrets.QA_AWS_RO_ROLE }}
           aws-region: ${{ secrets.QA_AWS_REGION }}
+          workers: ${{ inputs.workers }}
 
       # - name: Log Shard Distribution Info
       #   run: |
diff --git a/.github/workflows/test-e2e-ubuntu.yml b/.github/workflows/test-e2e-ubuntu.yml
index 6b9484835db1..c93bddb4dc03 100644
--- a/.github/workflows/test-e2e-ubuntu.yml
+++ b/.github/workflows/test-e2e-ubuntu.yml
@@ -230,6 +230,7 @@ jobs:
         with:
           aws-role-to-assume: ${{ secrets.QA_AWS_RO_ROLE }}
           aws-region: ${{ secrets.QA_AWS_REGION }}
+          workers: ${{ inputs.workers }}
 
       # Preloading ensures the Node.js binary is fully built and ready before
       # any parallel processes start, preventing runtime conflicts
diff --git a/.github/workflows/test-e2e-windows-build.yml b/.github/workflows/test-e2e-windows-build.yml
new file mode 100644
index 000000000000..ff28b5fa152b
--- /dev/null
+++ b/.github/workflows/test-e2e-windows-build.yml
@@ -0,0 +1,201 @@
+name: "E2E: Build Positron (Windows)"
+
+on:
+  workflow_call:
+    inputs:
+      commit:
+        description: "Commit SHA to test"
+        required: false
+        default: ""
+        type: string
+      skip_cache:
+        required: false
+        description: "Skip restoring caches (use when testing a specific commit)"
+        type: boolean
+        default: false
+      save_cache:
+        required: false
+        description: "Whether to save caches after the build (only one workflow per run should save to avoid race conditions)"
+        type: boolean
+        default: false
+
+permissions:
+  id-token: write
+  contents: read
+
+jobs:
+  build-windows:
+    name: build-windows
+    timeout-minutes: 60
+    runs-on: windows-latest-8x
+    env:
+      GITHUB_TOKEN: ${{ secrets.GITHUB_TOKEN }}
+      POSITRON_BUILD_NUMBER: 0
+
+    steps:
+      - uses: actions/checkout@v6
+        with:
+          fetch-depth: 0
+          submodules: recursive
+
+      - name: Checkout specific commit
+        if: ${{ inputs.commit != '' }}
+        run: git checkout ${{ inputs.commit }}
+
+      - name: Setup Node
+        uses: actions/setup-node@v6
+        with:
+          node-version-file: .nvmrc
+
+      # Defender's real-time scanning hits every file created during cache
+      # restore, npm install (100k+ files), compile, and Playwright install.
+      # Cover workspace, parent, and both possible drive roots since the
+      # GitHub Actions Windows runner uses D:\a (and sometimes C:\a).
+      - name: Disable Defender scanning for build paths
+        shell: pwsh
+        run: |
+          $workspace = "${{ github.workspace }}"
+          $parent = Split-Path -Parent $workspace
+          Add-MpPreference -ExclusionPath "${{ runner.temp }}" -ErrorAction SilentlyContinue
+          Add-MpPreference -ExclusionPath "$workspace" -ErrorAction SilentlyContinue
+          Add-MpPreference -ExclusionPath "$parent" -ErrorAction SilentlyContinue
+          Add-MpPreference -ExclusionPath "D:\a" -ErrorAction SilentlyContinue
+          Add-MpPreference -ExclusionPath "C:\a" -ErrorAction SilentlyContinue
+          Write-Host "Defender exclusions applied:"
+          Write-Host "  - ${{ runner.temp }}"
+          Write-Host "  - $workspace"
+          Write-Host "  - $parent"
+          Write-Host "  - D:\a, C:\a"
+          (Get-MpPreference).ExclusionPath | ForEach-Object { Write-Host "    [verified] $_" }
+
+      - name: 📦 Restore caches
+        if: ${{ !inputs.skip_cache }}
+        id: restore-caches
+        uses: ./.github/actions/restore-build-caches
+
+      - name: Install node dependencies
+        if: steps.restore-caches.outputs.cache-npm-core-hit != 'true' ||
+            steps.restore-caches.outputs.cache-npm-extensions-volatile-hit != 'true' ||
+            steps.restore-caches.outputs.cache-npm-extensions-stable-hit != 'true'
+        uses: nick-fields/retry@v4
+        env:
+          npm_config_arch: x64
+          PLAYWRIGHT_SKIP_BROWSER_DOWNLOAD: 1
+          ELECTRON_SKIP_BINARY_DOWNLOAD: 1
+          POSITRON_GITHUB_RO_PAT: ${{ github.token }}
+          POSITRON_PARALLEL_INSTALL: '0'         # Disabled on Windows due to native module file locking races
+          POSITRON_NPM_CONCURRENCY: '30'         # Unused when parallel install is disabled
+          NPM_CONFIG_AUDIT: 'false'              # Skip security audit during install (speeds up install)
+          NPM_CONFIG_FUND: 'false'               # Skip funding messages
+          NPM_CONFIG_UPDATE_NOTIFIER: 'false'    # Skip update notifications
+          POSITRON_EXTENSIONS_FILTER: ${{ (steps.restore-caches.outputs.cache-npm-extensions-volatile-hit == 'true' && steps.restore-caches.outputs.cache-npm-extensions-stable-hit != 'true' && 'stable') || (steps.restore-caches.outputs.cache-npm-extensions-volatile-hit != 'true' && steps.restore-caches.outputs.cache-npm-extensions-stable-hit == 'true' && 'volatile') || '' }}
+        with:
+          timeout_minutes: 90
+          max_attempts: 3
+          retry_wait_seconds: 5
+          shell: bash
+          command: |
+            set -e
+            npm --prefix build ci --no-audit --no-fund --fetch-timeout 120000
+            npm ci --no-audit --no-fund --fetch-timeout 120000
+
+      - name: Download binaries (Ark, Kallichore) with retry
+        uses: nick-fields/retry@v4
+        env:
+          POSITRON_GITHUB_RO_PAT: ${{ github.token }}
+        with:
+          timeout_minutes: 20
+          max_attempts: 3
+          retry_wait_seconds: 10
+          shell: bash
+          command: |
+            set -e
+            cd extensions/positron-r && npm rebuild --foreground-scripts
+            cd ../positron-supervisor && npm rebuild --foreground-scripts
+
+      - name: Compile Positron and Download Electron
+        run: npm exec -- npm-run-all --max-old-space-size=8192 -p compile "electron x64"
+
+      - name: Install Playwright browsers
+        run: npm run playwright-install
+
+      - name: Restore E2E test dependencies cache
+        id: cache-e2e
+        uses: actions/cache/restore@v5
+        with:
+          path: test/e2e/node_modules
+          key: ${{ runner.os }}-e2e-v1-${{ hashFiles('test/e2e/package-lock.json') }}
+
+      - name: Install E2E test dependencies
+        if: steps.cache-e2e.outputs.cache-hit != 'true'
+        run: npm --prefix test/e2e ci --no-audit --no-fund
+
+      - name: Save E2E test dependencies cache
+        if: ${{ steps.cache-e2e.outputs.cache-hit != 'true' }}
+        continue-on-error: true
+        uses: actions/cache/save@v5
+        with:
+          path: test/e2e/node_modules
+          key: ${{ runner.os }}-e2e-v1-${{ hashFiles('test/e2e/package-lock.json') }}
+
+      - name: Compile E2E Tests
+        run: npm --prefix test/e2e run compile
+
+      # Downloads Builtin Extensions (needed for integration & e2e testing)
+      - name: Download Builtin Extensions
+        shell: bash
+        run: npm run prelaunch
+
+      - name: 💾 Save caches
+        if: ${{ inputs.save_cache }}
+        uses: ./.github/actions/save-build-caches
+        with:
+          cache-npm-core-hit: ${{ steps.restore-caches.outputs.cache-npm-core-hit }}
+          cache-npm-extensions-volatile-hit: ${{ steps.restore-caches.outputs.cache-npm-extensions-volatile-hit }}
+          cache-npm-extensions-stable-hit: ${{ steps.restore-caches.outputs.cache-npm-extensions-stable-hit }}
+          cache-builtins-hit: ${{ steps.restore-caches.outputs.cache-builtins-hit }}
+          cache-playwright-hit: ${{ steps.restore-caches.outputs.cache-playwright-hit }}
+          extensions-volatile-hash: ${{ steps.restore-caches.outputs.extensions-volatile-hash }}
+          extensions-stable-hash: ${{ steps.restore-caches.outputs.extensions-stable-hash }}
+          package-locks-hash: ${{ steps.restore-caches.outputs.package-locks-hash }}
+          node-version: ${{ steps.restore-caches.outputs.node-version }}
+          playwright-version: ${{ steps.restore-caches.outputs.playwright-version }}
+
+      - name: Create Build Artifact
+        shell: bash
+        run: |
+          WORKSPACE=$(cygpath -u "${GITHUB_WORKSPACE}")
+          WORKSPACE_PARENT="$(dirname "${WORKSPACE}")"
+          WORKSPACE_NAME="$(basename "${WORKSPACE}")"
+          ARTIFACTS_DIR="$(cygpath -u "${RUNNER_TEMP}")/artifacts"
+          mkdir -p "${ARTIFACTS_DIR}"
+          echo "Creating build artifact from ${WORKSPACE}..."
+          # Tar the full workspace so shards skip npm ci and compile entirely.
+          # Exclude .git (shards restore their own via checkout) and npm/pip caches.
+          # Prefer zstd (faster compress+decompress, smaller output) with gzip fallback.
+          if command -v zstd >/dev/null 2>&1; then
+            echo "Using zstd (multithreaded) for compression"
+            tar -C "${WORKSPACE_PARENT}" \
+              --exclude="${WORKSPACE_NAME}/.git" \
+              --exclude="${WORKSPACE_NAME}/.npm-cache" \
+              --use-compress-program='zstd -T0 -1' \
+              -cf "${ARTIFACTS_DIR}/positron-build.tar.zst" \
+              "${WORKSPACE_NAME}"
+            echo "Artifact size: $(du -sh "${ARTIFACTS_DIR}/positron-build.tar.zst")"
+          else
+            echo "zstd not available, falling back to gzip"
+            tar -C "${WORKSPACE_PARENT}" \
+              --exclude="${WORKSPACE_NAME}/.git" \
+              --exclude="${WORKSPACE_NAME}/.npm-cache" \
+              -czf "${ARTIFACTS_DIR}/positron-build.tar.gz" \
+              "${WORKSPACE_NAME}"
+            echo "Artifact size: $(du -sh "${ARTIFACTS_DIR}/positron-build.tar.gz")"
+          fi
+
+      - name: Upload Build Artifact
+        uses: actions/upload-artifact@v7
+        with:
+          name: positron-build-windows
+          path: ${{ runner.temp }}/artifacts
+          retention-days: 1
+          compression-level: 0  # already compressed
diff --git a/.github/workflows/test-e2e-windows-run.yml b/.github/workflows/test-e2e-windows-run.yml
index 36b1625b29a2..01f66a587654 100644
--- a/.github/workflows/test-e2e-windows-run.yml
+++ b/.github/workflows/test-e2e-windows-run.yml
@@ -16,16 +16,6 @@ on:
         required: false
         default: ""
         type: string
-      skip_cache:
-        required: false
-        description: "Skip restoring caches (use when testing a specific commit)"
-        type: boolean
-        default: false
-      save_cache:
-        required: false
-        description: "Whether to save caches after the run (only one job per workflow should save to avoid race conditions)"
-        type: boolean
-        default: false
       grep:
         required: false
         description: "Only run tests matching this regex. Supports tags (comma-separated), titles, filenames. Confirm pattern matching locally with: npx playwright test --grep=<regex>"
@@ -152,103 +142,60 @@ jobs:
       - name: Install uv
         uses: astral-sh/setup-uv@v7
 
-      - name: 📦 Restore caches
-        if: ${{ !inputs.skip_cache }}
-        id: restore-caches
-        uses: ./.github/actions/restore-build-caches
-
-      - name: Install node dependencies
-        if: steps.restore-caches.outputs.cache-npm-core-hit != 'true' ||
-            steps.restore-caches.outputs.cache-npm-extensions-volatile-hit != 'true' ||
-            steps.restore-caches.outputs.cache-npm-extensions-stable-hit != 'true'
-        uses: nick-fields/retry@v4
-        env:
-          npm_config_arch: x64
-          PLAYWRIGHT_SKIP_BROWSER_DOWNLOAD: 1
-          ELECTRON_SKIP_BINARY_DOWNLOAD: 1
-          POSITRON_GITHUB_RO_PAT: ${{ github.token }}
-          POSITRON_PARALLEL_INSTALL: '0'         # Disabled on Windows due to native module file locking races
-          POSITRON_NPM_CONCURRENCY: '30'         # Unused when parallel install is disabled
-          NPM_CONFIG_AUDIT: 'false'              # Skip security audit during install (speeds up install)
-          NPM_CONFIG_FUND: 'false'               # Skip funding messages
-          NPM_CONFIG_UPDATE_NOTIFIER: 'false'    # Skip update notifications
-          # Extension filter logic:
-          #   volatile=hit, stable=miss  → filter=stable (install stable only)
-          #   volatile=miss, stable=hit  → filter=volatile (install volatile only)
-          #   both hit OR both miss      → filter='' (install all or skip via parent condition)
-          POSITRON_EXTENSIONS_FILTER: ${{ (steps.restore-caches.outputs.cache-npm-extensions-volatile-hit == 'true' && steps.restore-caches.outputs.cache-npm-extensions-stable-hit != 'true' && 'stable') || (steps.restore-caches.outputs.cache-npm-extensions-volatile-hit != 'true' && steps.restore-caches.outputs.cache-npm-extensions-stable-hit == 'true' && 'volatile') || '' }}
-        with:
-          timeout_minutes: 90
-          max_attempts: 3
-          retry_wait_seconds: 5
-          shell: bash
-          # Install strategy:
-          # 1. Pre-install build/ so postinstall can access gulp-merge-json
-          # 2. Run root npm ci which triggers postinstall (installs 60+ extensions in parallel, concurrency: 30)
-          # 3. Postinstall skips build/ since it's already installed (avoids duplicate work)
-          # Note: test/e2e is installed in separate step below (not cached, always runs)
-          # See https://github.com/posit-dev/positron/issues/3481 for why retry is needed (windows-process-tree failures)
-          command: |
-            set -e  # Exit immediately if any command fails
-
-            # Pre-install build directory (required by postinstall for gulp-merge-json)
-            npm --prefix build ci --no-audit --no-fund --fetch-timeout 120000
-
-            # Run root npm ci (triggers postinstall which installs all extensions)
-            npm ci --no-audit --no-fund --fetch-timeout 120000
-
-            echo "npm ci completed successfully"
-
-      - name: Download binaries (Ark, Kallichore) with retry
-        uses: nick-fields/retry@v4
-        env:
-          POSITRON_GITHUB_RO_PAT: ${{ github.token }}
-        with:
-          timeout_minutes: 20
-          max_attempts: 3
-          retry_wait_seconds: 10
-          shell: bash
-          command: |
-            set -e  # Exit immediately if any command fails
-
-            # Download platform-specific binaries for Windows
-            # Wrapped in retry due to occasional GitHub API timeouts
-            cd extensions
-            echo "Downloading Ark binary..."
-            cd positron-r && npm rebuild --foreground-scripts
-            echo "Downloading Kallichore binary..."
-            cd ../positron-supervisor && npm rebuild --foreground-scripts
-
-      - name: Compile Positron and Download Electron
-        run: npm exec -- npm-run-all --max-old-space-size=8192 -p compile "electron x64"
-
-      - name: Install Playwright browsers
-        run: npm run playwright-install
-
-      - name: Install E2E test dependencies
-        run: npm --prefix test/e2e ci --no-audit --no-fund
-
-      - name: Compile E2E Tests
-        run: npm --prefix test/e2e run compile
-
-      # Downloads Builtin Extensions (needed for integration & e2e testing)
-      - shell: bash
-        run: npm run prelaunch
-
-      - name: 💾 Save caches
-        if: ${{ inputs.save_cache && matrix.shard == 1 }}
-        uses: ./.github/actions/save-build-caches
+      - name: Download build artifact
+        uses: actions/download-artifact@v8
         with:
-          cache-npm-core-hit: ${{ steps.restore-caches.outputs.cache-npm-core-hit }}
-          cache-npm-extensions-volatile-hit: ${{ steps.restore-caches.outputs.cache-npm-extensions-volatile-hit }}
-          cache-npm-extensions-stable-hit: ${{ steps.restore-caches.outputs.cache-npm-extensions-stable-hit }}
-          cache-builtins-hit: ${{ steps.restore-caches.outputs.cache-builtins-hit }}
-          cache-playwright-hit: ${{ steps.restore-caches.outputs.cache-playwright-hit }}
-          extensions-volatile-hash: ${{ steps.restore-caches.outputs.extensions-volatile-hash }}
-          extensions-stable-hash: ${{ steps.restore-caches.outputs.extensions-stable-hash }}
-          package-locks-hash: ${{ steps.restore-caches.outputs.package-locks-hash }}
-          node-version: ${{ steps.restore-caches.outputs.node-version }}
-          playwright-version: ${{ steps.restore-caches.outputs.playwright-version }}
+          name: positron-build-windows
+          path: ${{ runner.temp }}/artifacts
+
+      # Defender's real-time scanning hits every file created during extract.
+      # The tar step writes to dirname(github.workspace) — one level up from
+      # the repo checkout — so the parent must be excluded, not just the
+      # checkout itself. Also handle Windows GitHub runners using D:\a as the
+      # actions root.
+      - name: Disable Defender scanning for extract paths
+        shell: pwsh
+        run: |
+          $workspace = "${{ github.workspace }}"
+          $parent = Split-Path -Parent $workspace
+          Add-MpPreference -ExclusionPath "${{ runner.temp }}" -ErrorAction SilentlyContinue
+          Add-MpPreference -ExclusionPath "$workspace" -ErrorAction SilentlyContinue
+          Add-MpPreference -ExclusionPath "$parent" -ErrorAction SilentlyContinue
+          # GitHub Actions on Windows typically runs on D:\, but C:\ has been
+          # seen too. Cover both runner working roots.
+          Add-MpPreference -ExclusionPath "D:\a" -ErrorAction SilentlyContinue
+          Add-MpPreference -ExclusionPath "C:\a" -ErrorAction SilentlyContinue
+          Write-Host "Defender exclusions applied:"
+          Write-Host "  - ${{ runner.temp }}"
+          Write-Host "  - $workspace"
+          Write-Host "  - $parent (extract destination)"
+          Write-Host "  - D:\a, C:\a"
+          # Print current exclusions to verify
+          (Get-MpPreference).ExclusionPath | ForEach-Object { Write-Host "    [verified] $_" }
+
+      - name: Extract build artifact
+        shell: bash
+        run: |
+          WORKSPACE=$(cygpath -u "${GITHUB_WORKSPACE}")
+          WORKSPACE_PARENT="$(dirname "${WORKSPACE}")"
+          ARTIFACTS_DIR="$(cygpath -u "${RUNNER_TEMP}")/artifacts"
+          if [ -f "${ARTIFACTS_DIR}/positron-build.tar.zst" ]; then
+            command -v zstd >/dev/null 2>&1 || { echo "zstd not found but .tar.zst artifact exists"; exit 1; }
+            echo "Extracting zstd archive with parallel decompression..."
+            zstd -d -T0 --stdout "${ARTIFACTS_DIR}/positron-build.tar.zst" | \
+              tar --no-same-owner --no-same-permissions -x -C "${WORKSPACE_PARENT}"
+            echo "Cleaning up archive to free disk space"
+            rm -f "${ARTIFACTS_DIR}/positron-build.tar.zst"
+          elif [ -f "${ARTIFACTS_DIR}/positron-build.tar.gz" ]; then
+            echo "Extracting gzip archive..."
+            tar --no-same-owner --no-same-permissions \
+              -C "${WORKSPACE_PARENT}" \
+              -xzf "${ARTIFACTS_DIR}/positron-build.tar.gz"
+            echo "Cleaning up archive to free disk space"
+            rm -f "${ARTIFACTS_DIR}/positron-build.tar.gz"
+          else
+            echo "No build artifact found in ${ARTIFACTS_DIR}" && exit 1
+          fi
 
       - name: Download Python requirements file
         id: download-python-reqs
diff --git a/.github/workflows/test-full-suite.yml b/.github/workflows/test-full-suite.yml
index e0d6782bed1a..8cdd0fd816d2 100644
--- a/.github/workflows/test-full-suite.yml
+++ b/.github/workflows/test-full-suite.yml
@@ -167,15 +167,24 @@ jobs:
       max_failures: 6  # 20 max failures / 4 shards = 5, rounded to 6 to avoid premature failure of the entire suite
       enable_diagnostic_logging: ${{ inputs.enable_diagnostic_logging }}
 
+  setup-windows:
+    name: setup-windows
+    needs: [validate-commit]
+    if: ${{ !failure() && !cancelled() && (github.event_name == 'schedule' || inputs.run_e2e_windows) }}
+    uses: ./.github/workflows/test-e2e-windows-build.yml
+    secrets: inherit
+    with:
+      commit: ${{ inputs.commit != 'latest' && inputs.commit || '' }}
+      skip_cache: ${{ inputs.commit != 'latest' }}
+
   e2e-windows:
     name: e2e
-    needs: [validate-commit]
+    needs: [validate-commit, setup-windows]
     if: ${{ !failure() && !cancelled() && (github.event_name == 'schedule' || inputs.run_e2e_windows) }}
     uses: ./.github/workflows/test-e2e-windows-run.yml
     secrets: inherit
     with:
       commit: ${{ inputs.commit != 'latest' && inputs.commit || '' }}
-      skip_cache: ${{ inputs.commit != 'latest' }}
       grep: ${{ inputs.grep || '' }}
       project: "e2e-windows"
       display_name: "electron-win"
diff --git a/.github/workflows/test-merge.yml b/.github/workflows/test-merge.yml
index dd9a543657e9..7f036b950abc 100644
--- a/.github/workflows/test-merge.yml
+++ b/.github/workflows/test-merge.yml
@@ -6,16 +6,23 @@ on:
       - main
       - "prerelease/**"
       - "release/**"
+  # TEMPORARY: trigger once on this PR to validate the new shard counts.
+  # Revert this block before merging.
+  pull_request:
+    branches:
+      - main
+    paths:
+      - .github/workflows/test-merge.yml
 
 jobs:
-  setup:
+  setup-ubuntu:
     name: setup
     uses: ./.github/workflows/test-e2e-ubuntu-build.yml
     secrets: inherit
 
   e2e-electron:
     name: e2e
-    needs: [setup]
+    needs: [setup-ubuntu]
     uses: ./.github/workflows/test-e2e-ubuntu-run.yml
     with:
       grep: ""
@@ -24,31 +31,38 @@ jobs:
       install_undetectable_interpreters: false
       install_license: false
       upload_logs: false
-      shards: 2
-      matrix: '{"shard":[1,2]}'
+      shards: 6
+      matrix: '{"shard":[1,2,3,4,5,6]}'
       workers: 2
       allow_soft_fail: true
-      max_failures: 10  # 20 max failures / 2 shards = 10
+      max_failures: 4  # 20 max failures / 6 shards = 3.33, rounded up to 4
+    secrets: inherit
+
+  setup-windows:
+    name: setup
+    uses: ./.github/workflows/test-e2e-windows-build.yml
     secrets: inherit
+    with:
+      save_cache: true
 
   e2e-windows:
     name: e2e
+    needs: [setup-windows]
     uses: ./.github/workflows/test-e2e-windows-run.yml
     secrets: inherit
     with:
-      save_cache: true
       grep: ""
       project: "e2e-windows"
       display_name: "electron-win"
       allow_soft_fail: true
       upload_logs: false
-      shards: 3
-      matrix: '{"shard":[1,2,3]}'
-      max_failures: 7  # 20 max failures / 3 shards = 6.66, rounded up to 7
+      shards: 6
+      matrix: '{"shard":[1,2,3,4,5,6]}'
+      max_failures: 4  # 20 max failures / 6 shards = 3.33, rounded up to 4
 
   e2e-ubuntu-chromium:
     name: e2e
-    needs: [setup]
+    needs: [setup-ubuntu]
     uses: ./.github/workflows/test-e2e-ubuntu-run.yml
     with:
       grep: ""
@@ -57,11 +71,11 @@ jobs:
       install_undetectable_interpreters: false
       install_license: true
       upload_logs: true
-      shards: 2
-      matrix: '{"shard":[1,2]}'
+      shards: 5
+      matrix: '{"shard":[1,2,3,4,5]}'
       workers: 2
       allow_soft_fail: true
-      max_failures: 10  # 20 max failures / 2 shards = 10
+      max_failures: 4  # 20 max failures / 5 shards = 4
     secrets: inherit
 
   unit-tests:
@@ -78,45 +92,47 @@ jobs:
     with:
       pull_request: false
 
-  slack-notify:
-    if: always()
-    needs:
-      [
-        setup,
-        unit-tests,
-        ext-host-tests,
-        e2e-electron,
-        e2e-windows,
-        e2e-ubuntu-chromium,
-      ]
-    runs-on: ubuntu-latest
-    steps:
-      - name: Checkout
-        if: always()
-        uses: actions/checkout@v6
-        with:
-          sparse-checkout: .github/actions/notify-e2e-insights
-
-      - name: Notify E2E Test Insights
-        if: always()
-        uses: ./.github/actions/notify-e2e-insights
-        with:
-          webhook_secret: ${{ secrets.E2E_INSIGHTS_WEBHOOK_SECRET }}
-          connect_api_key: ${{ secrets.CONNECT_API_KEY }}
-          repo_id: "positron"
-          filter_jobs: "(e2e / ([^0-9]*)|unit|ext-host)$"
-
-  slack-notify-win-extensions:
-    if: ${{ needs.e2e-windows-electron.outputs.extensions_failed == 'true' }}
-    needs:
-      - e2e-windows
-    runs-on: ubuntu-latest
-    steps:
-      - name: Notify Slack
-        uses: midleman/slack-workflow-status@v3.1.3
-        with:
-          gh_repo_token: ${{ secrets.GITHUB_TOKEN }}
-          slack_token: ${{ secrets.SLACK_TOKEN_TEST_STATUS }}
-          slack_channel: "#positron-rstats-test-results"
-          filter_jobs: "windows"
-          notify_on: "always"
+# TEMPORARY: slack notifications disabled while validating shard counts on this PR.
+# Restore both jobs before merging.
+#  slack-notify:
+#    if: always()
+#    needs:
+#      [
+#        setup,
+#        unit-tests,
+#        ext-host-tests,
+#        e2e-electron,
+#        e2e-windows,
+#        e2e-ubuntu-chromium,
+#      ]
+#    runs-on: ubuntu-latest
+#    steps:
+#      - name: Checkout
+#        if: always()
+#        uses: actions/checkout@v6
+#        with:
+#          sparse-checkout: .github/actions/notify-e2e-insights
+#
+#      - name: Notify E2E Test Insights
+#        if: always()
+#        uses: ./.github/actions/notify-e2e-insights
+#        with:
+#          webhook_secret: ${{ secrets.E2E_INSIGHTS_WEBHOOK_SECRET }}
+#          connect_api_key: ${{ secrets.CONNECT_API_KEY }}
+#          repo_id: "positron"
+#          filter_jobs: "(e2e / ([^0-9]*)|unit|ext-host)$"
+#
+#  slack-notify-win-extensions:
+#    if: ${{ needs.e2e-windows.outputs.extensions_failed == 'true' }}
+#    needs:
+#      - e2e-windows
+#    runs-on: ubuntu-latest
+#    steps:
+#      - name: Notify Slack
+#        uses: midleman/slack-workflow-status@v3.1.3
+#        with:
+#          gh_repo_token: ${{ secrets.GITHUB_TOKEN }}
+#          slack_token: ${{ secrets.SLACK_TOKEN_TEST_STATUS }}
+#          slack_channel: "#positron-rstats-test-results"
+#          filter_jobs: "windows"
+#          notify_on: "always"
diff --git a/.github/workflows/test-pull-request.yml b/.github/workflows/test-pull-request.yml
index 64da42903fff..0f9d9229de2a 100644
--- a/.github/workflows/test-pull-request.yml
+++ b/.github/workflows/test-pull-request.yml
@@ -57,13 +57,21 @@ jobs:
       allow_soft_fail: false
     secrets: inherit
 
-  e2e-windows-electron:
+  setup-windows-electron:
     needs: pr-tags
     if: ${{ needs.pr-tags.outputs.win_tag_found == 'true' }}
+    name: setup-windows
+    uses: ./.github/workflows/test-e2e-windows-build.yml
+    with:
+      save_cache: true
+    secrets: inherit
+
+  e2e-windows-electron:
+    needs: [pr-tags, setup-windows-electron]
+    if: ${{ needs.pr-tags.outputs.win_tag_found == 'true' }}
     name: e2e
     uses: ./.github/workflows/test-e2e-windows-run.yml
     with:
-      save_cache: true
       grep: ${{ needs.pr-tags.outputs.tags }}
       display_name: "electron-win"
       upload_logs: false
diff --git a/build/lib/extensions.ts b/build/lib/extensions.ts
index e3f521c31165..8692acce66ec 100644
--- a/build/lib/extensions.ts
+++ b/build/lib/extensions.ts
@@ -184,14 +184,6 @@ function fromLocalWebpack(extensionPath: string, webpackConfigFileName: string,
 	// --- Start PWB: from Positron ---
 	// Replace vsce.listFiles with listExtensionFiles to queue the work
 	listExtensionFiles({ cwd: extensionPath, packageManager: packageManager, packagedDependencies }).then(fileNames => {
-		const files = fileNames
-			.map(fileName => path.join(extensionPath, fileName))
-			.map(filePath => new File({
-				path: filePath,
-				stat: fs.statSync(filePath),
-				base: extensionPath,
-				contents: fs.createReadStream(filePath)
-			}));
 
 		// check for a webpack configuration files, then invoke webpack
 		// and merge its output with the files stream.
@@ -263,12 +255,9 @@ function fromLocalWebpack(extensionPath: string, webpackConfigFileName: string,
 			});
 		});
 
-		es.merge(...webpackStreams, es.readArray(files))
-			// .pipe(es.through(function (data) {
-			// 	// debug
-			// 	console.log('out', data.path, data.contents.length);
-			// 	this.emit('data', data);
-			// }))
+		// Use createSequentialFileStream to open one file at a time, preventing EMFILE errors
+		// when extensions with many files (e.g. positron-python's python_files) are packaged.
+		es.merge(...webpackStreams, createSequentialFileStream(extensionPath, fileNames))
 			.pipe(result);
 
 	}).catch(err => {
diff --git a/test/e2e/fixtures/test-setup/options.fixtures.ts b/test/e2e/fixtures/test-setup/options.fixtures.ts
index b27f69fc13e3..0ede6a4eba4e 100644
--- a/test/e2e/fixtures/test-setup/options.fixtures.ts
+++ b/test/e2e/fixtures/test-setup/options.fixtures.ts
@@ -76,7 +76,8 @@ export function OptionsFixture() {
 			} : {}),
 			// --- End Positron ---
 			useExternalServer: project.useExternalServer,
-			externalServerUrl: project.externalServerUrl
+			externalServerUrl: project.externalServerUrl,
+			workerIndex: workerInfo.parallelIndex,
 		};
 
 		options.userDataDir = getRandomUserDataDir(options);
diff --git a/test/e2e/infra/code.ts b/test/e2e/infra/code.ts
index b4c88d9e91b8..c7fca4fab341 100644
--- a/test/e2e/infra/code.ts
+++ b/test/e2e/infra/code.ts
@@ -56,6 +56,8 @@ export interface LaunchOptions {
 	readonly externalServerUrl?: string;
 	/** Video recording configuration for demo scripts */
 	readonly recordVideo?: { dir: string; size?: { width: number; height: number } };
+	/** Playwright parallelIndex for per-worker resource isolation (e.g. Xvfb display on Linux) */
+	readonly workerIndex?: number;
 	// --- End Positron ---
 }
 
diff --git a/test/e2e/infra/electron.ts b/test/e2e/infra/electron.ts
index 575a2e9cd278..52424ab7915b 100644
--- a/test/e2e/infra/electron.ts
+++ b/test/e2e/infra/electron.ts
@@ -24,6 +24,15 @@ export async function resolveElectronConfiguration(options: LaunchOptions): Prom
 	const { codePath, workspacePath, extensionsPath, userDataDir, remote, logger, logsPath, crashesPath, extraArgs } = options;
 	const env = { ...process.env };
 
+	// --- Start Positron ---
+	// Per-worker virtual display isolation on Linux. Each Playwright worker
+	// gets its own Xvfb display (:10 + parallelIndex) so workers don't race
+	// on a shared X server. Requires CI to start N Xvfb displays beginning at :10.
+	if (typeof options.workerIndex === 'number' && process.platform === 'linux') {
+		env.DISPLAY = `:${10 + options.workerIndex}`;
+	}
+	// --- End Positron ---
+
 	const args: string[] = [
 		'--skip-release-notes',
 		'--skip-welcome',