Double Fine has laid off 23 employees, just three weeks after Xbox spun the studio off as an independent company. The Double Fine layoffs follow Microsoft’s decision to let Double Fine Productions go free rather than shut it down. That decision was part of a broader restructuring that eliminated 3,200 jobs across the company in July.
Tim Schafer, the studio’s founder and president, announced the cuts in a message posted to Bluesky. He said the studio’s new independence means adjusting to a size it can sustain. Without a large publisher behind it, that adjustment came with a real cost in jobs.
The Double Fine layoffs, in Tim Schafer’s words
Schafer wrote that only the survival of the studio would make its leadership consider such a painful action. “Our transition to becoming an independent company means becoming a size that we can sustain,” he wrote. “The people we are losing were all important. They all made an impact on our games and culture, and they will be missed.”
Schafer added that Double Fine is committed to supporting each affected employee. He thanked them for their work and their commitment to the studio’s culture. The message did not name which teams or projects were affected.
Compulsion Games faces the same pressure
Compulsion Games is the other studio Microsoft spun off as independent during the same restructuring. Just one week after its split, Compulsion said it needed new work to stay afloat. Several Compulsion employees had already started looking for new jobs before the Xbox cuts were finalized. They expected their positions would not survive the transition to independence.
Bloomberg reporter Jason Schreier said Double Fine had roughly 90 employees before this round of layoffs. The studio has not confirmed a new headcount. However, the reported figures would put the total at around 67 if no other departures have occurred since.
Why Xbox let these studios go instead of closing them
Xbox drew some praise from fans for letting Double Fine and Compulsion continue independently instead of closing them outright during the July restructuring. Meanwhile, other studios caught up in that round of cuts shut down entirely, with hundreds of employees losing their jobs at once.
Three weeks later, the situation at Double Fine shows how difficult that independence can be in practice. The studio built its reputation on offbeat, modestly selling games like Psychonauts and Brutal Legend, projects that depended on a publisher’s budget and patience. Without Microsoft’s backing, Double Fine now has to fund its own development at a scale the studio can support on its own.
It is not yet clear which games or teams at Double Fine will be affected by the cuts going forward. Schafer’s message did not mention any specific projects currently in development, and the studio has not announced further changes since the layoffs were confirmed.