DeviiLabor and Workplace6 min read
Double Fine cuts 23 jobs weeks after leaving Xbox
Studio founder Tim Schafer confirmed 23 layoffs on July 28, weeks after Double Fine was spun out of Xbox as an independent studio with its IP intact.
Double Fine Productions laid off 23 staff members, Tim Schafer confirmed on July 28, 2026. The cuts landed only weeks after Xbox spun the Psychonauts studio back into independence as part of its larger July restructure.
Scale of the hit
Reporting around the studio put headcount near 90 before the reductions, which means roughly a quarter of the team was affected in one round. Independence preserved Double Fine's IP and catalog, but it did not magically fund every role the Xbox era supported.
Wider pattern
Studio spin-outs can look like soft landings until the first budget reset. Double Fine's cuts show that leaving a platform holder often means shrinking to match a smaller balance sheet, even when the brand survives.