Double Fine Lays Off 23 Staff Just Weeks After Split From Xbox

Double Fine Productions, the studio behind Psychonauts and Psychonauts 2, has announced layoffs affecting 23 employees, roughly 25.6 percent of its total staff. The cuts come just three weeks after the studio was spun off from Xbox as part of Microsoft's ongoing restructuring efforts, which saw Double Fine among five studios divested from Xbox Game Studios. Founder Tim Schafer confirmed the news, saying, "Only the survival of our studio would ever make us consider such a painful action," and acknowledging that "the people we are losing were all important."

The layoffs paint a sobering picture of what independence from a major publisher can look like in practice. While Double Fine managed to avoid closure during Xbox's restructuring, the transition to independent status has come at a steep human cost. Xbox also publicly addressed the situation following the announcement. The studio, which first made its name with the original 2005 Psychonauts, now faces the challenge of charting its own course without the financial backing of one of the industry's largest platform holders.

Sources