Developer studio Double Fine Productions announces that it has laid off members of its team following the studio’s departure from Xbox.
Double Fine, the developer responsible for games like the Psychonauts franchise, Brutal Legend, and most recently Kiln, is cutting about a third of its overall staff in layoffs. The move comes following the reveal that the Psychonauts developer would be parting ways with Xbox.
Double Fine was originally bought by Xbox back in 2019. The studio successfully released three titles during its time with Xbox, including the long-awaited Psychonauts 2, plus Keeper and Kiln. Back in June 2026, Double Fine responded to rumors of being potentially shut down with just an emoji, but it was later revealed that the studio was going independent again, instead.
Double Fine Productions Reveals Layoffs
Double Fine Productions has announced that the team let go of 23 staff members in necessary layoffs. In a message shared on official social media channels, Double Fine founder Tim Schafer explained that the team is tightly-knit, and that the decision to let members go was not made lightly. However, it became necessary in order for Double Fine as a whole to survive. Now that Double Fine no longer has support from Xbox, it seems the studio couldn’t maintain the same size of team it had, which was somewhere around 90 people. Schafer noted that the studio would be supporting those impacted as much as possible, and that they would be missed at the game studio.
This development is just the latest in the fallout following Xbox’s restructuring. Compulsion Games exited and became independent again like Double Fine, while Undead Labs and Ninja Theory have “entered terms to join new ownership.” Xbox as a whole is experiencing somewhere around 3,200 layoffs, and concerns have arisen regarding the studios remaining with Xbox and how all these cuts will impact their business. Zenimax Media developers have claimed that the studio lost tremendous knowledge and expertise from the cuts, and Bethesda and Obsidian have allegedly been left trying to pick up the pieces after the fact.
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