Double Fine announced yesterday (July 28) the layoff of 23 employees, approximately 25.6% of its staff, as confirmed in a statement from founder Tim Schafer on Bluesky. The move comes three weeks after the studio gained independence when Xbox divested from its studios in July 2026.
According to Double Fine itself, the reduction is "necessary" so the company can "become a size that we can sustain." The statement, covered by outlets including PC Gamer and Polygon, states that "only the survival of our studio would ever make us consider such a painful action." Before the cuts, Double Fine employed approximately 90 people, per Bloomberg reporting cited by GamesRadar.
Double Fine is behind titles like Psychonauts (2005), Brutal Legend, and Costume Quest. Among those affected is Ben Johnson, a game designer on Kiln, who shared news of the layoffs on social media shortly before the official announcement.
The announcement follows Xbox's broader restructuring in July, which cut approximately 3,200 employees and divested from multiple studios including Arkane Studios, Ninja Theory, Undead Labs, and Compulsion Games. After divestment, some of these studios were acquired by other investors or returned to independent status.
