Double Fine hit with layoffs after exiting Xbox - “The people we are losing were all important”
Double Fine Productions has laid off 23 employees, approximately 25% of its roughly 90-person workforce, following its recent separation from Xbox maker Microsoft. The layoffs were announced on July 28, 2026, by studio head Tim Schafer, who stated they were necessary for the studio’s “survival” as it transitions to independence.
The cuts come roughly three weeks after Xbox announced a massive restructuring that eliminated 3,200 jobs across the division and ended relationships with four studios, including Double Fine. Unlike some peers, Double Fine managed to regain independence rather than being shut down entirely. However, Schafer explained that becoming independent also meant the studio needed to scale down to a sustainable size.
In his statement, Schafer emphasized that “the people we are losing were all important” and committed to supporting affected employees “as best we can.” He characterized the layoffs as a difficult but necessary action, stating: “Only the survival of our studio would ever make us consider such a painful move.”
The layoffs represent a harsh aftermath of Microsoft’s broader Xbox restructuring and underscore ongoing consolidation challenges in the gaming industry, where studios face difficult choices after separating from major publishers.
Sources
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