Newly Independent Double Fine Has to Lay Off 23 Devs to Ensure Survival of the Studio

Only considered the move to make sure the team survives

by · Push Square

Psychonauts developer Double Fine, having just returned to independence to avoid closure by Xbox, has been forced to let go of 23 employees to ensure the studio can stay afloat.

The cuts were confirmed in a social media post from Tim Schafer, which read: "Today, Double Fine Productions let go of 23 members of our staff. As a small, tightly-knit team, these actions are not taken lightly. Only the survival of our studio would ever make us consider such a painful action. Our transition to becoming an independent company also means becoming a size that we can sustain."

The statement suggests the team wouldn't have survived at the size it was prior to the layoffs, and the move will better position Double Fine for survivability in the future.

— Double Fine (@doublefine.com) 2026-07-28T19:01:18.106Z

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"The people we are losing were all important," Schafer continued. "They all made an impact on our games and culture, and they will be missed." The studio is now working with those impacted to support them the best it can.

Double Fine was one of five first-party Xbox studios impacted by Microsoft's cuts and layoffs at the start of this month. South of Midnight developer Compulsion Games joined it in returning to independence, while Hellblade studio Ninja Theory and State of Decay 3 team Undead Labs were sold to currently unknown buyers.

Arkane Studios is also under consultation to "review [its] strategic options", though an update on what's been happening since the news went public hasn't been provided. 1,600 Microsoft employees lost their jobs earlier in July, and another wave of 1,600 job losses will follow before July 2027.

How do you react to this news? Let us know in the comments below.

[source bsky.app]

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About Liam Croft

Liam grew up with a PlayStation controller in his hands and a love for Metal Gear Solid. Nowadays, he's found playing the latest and greatest PS5 games as well as supporting Derby County. That last detail is his downfall.

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