Double Fine, greatest recognized for creating the 2005 platform recreation Psychonauts, has laid off 25.6% of its workers three weeks after Xbox’s large restructuring efforts have been revealed.
The studio introduced the layoffs on July 28, 2026, confirming that this downsizing was a direct consequence of turning into an impartial firm after Xbox unloaded them as half of its personal restructuring earlier this month.
“As a small, tightly-knit workforce, these actions aren’t taken flippantly,” a statement from Double Fine reads. “Solely the survival of our studio would ever make us take into account such a painful motion. Our transition to turning into an impartial firm additionally means turning into a measurement that we are able to maintain. The folks we’re dropping have been all necessary. All of them made an impression on our video games and tradition, and they are going to be missed. We’re dedicated to supporting every affected particular person as greatest as we are able to, and we thank them for his or her exhausting work and dedication to the inventive spirit we cherish right here at Double Fine.”
(*25*)
Xbox additionally launched an announcement concerning the layoffs, confirming that the studio absolutely returned to its impartial standing earlier this week, preserving their “IP, catalog, and runway for his or her subsequent video games.”
“As they start their subsequent chapter as an impartial studio, we glance ahead to seeing what they create subsequent. Double Fine is now absolutely impartial and manages its personal operations,” a spokesperson said to Kotaku.
As revealed by Jason Schreier, Double Fine is a roughly 90-person workforce, which means that round 25.5% of workers was lower because the studio shrinks again to a manageable measurement to match its impartial standing.
Double Fine’s self-management, in addition to that of Compulsion Video games (We Comfortable Few, South of Midnight), was revealed earlier this month. Each studios bought to preserve their IPs within the transition, with every thanking followers for his or her continued help and promising to share updates on future tasks at a later date.
This isn’t the primary time both growth home has been impartial; in reality, each have been based as indie studios firstly, with Double Fine famously based by LucasArts alum Tim Schafer in 2002.
On July 6, 2026, Xbox CEO Asha Sharma despatched out an inside e-mail to workers saying essentially the most “important” restructuring within the firm’s historical past that might impression 1000’s of workers. 3,200 have been on the chopping block, with 1,600 laid off that day. As famous by IGN’s Wesley Yin-Poole, this implies about one-fifth of its workers can be impacted, in addition to quite a few studios Xbox bought throughout its notorious shopping for spree during the last 5 years.
“I would like Xbox to be one of the few corporations that entertains greater than a billion folks every day and provides everybody the chance to create and join,” Sharma wrote in her e-mail. “I do know we are able to obtain this objective. XBOX has many of essentially the most beloved franchises in leisure historical past, gifted studios world wide, and we’ll return to progress in 2027.
“Historical past is full of corporations that mistake longevity for inevitability. We is not going to be one of them.”
Virginia (she/her) is IGN’s Information Editor. With ten years of expertise reporting on video games and leisure, she’s bought a storied background within the combating recreation group, influencer information, and viral on-line developments. Discover her on Twitter at @TheeMissGlaze.